That's why the Lion City has been bullish about fintech since before it was a buzzword. The Monetary Authority of Singapore (MAS) has supported its development while urging startups to cooperate with incumbents rather than simply disrupt them.
Accenture estimates that investors ploughed $735 million into Singapore fintechs from January-September 2019, up 69% annually and surpassing the $642 million for all of 2018. The top areas for investments are payments (34%), lending (20%) and insurtech (17%).
Five of Singapore's largest fintech deals ever took place in the first half of 2019, according to The Business Times. Those include cloud company Deskera raising US$100 million in May, financial product marketplace GoBear's US$80 million fundraising round (also in May), and cashback platform Shopback closing a $45 million equity-funding round in April.
"There's a lot brewing in the Singapore fintech ecosystem, and this steady flow of funds shows investors' confidence in the industry’s future growth potential," Divyesh Vithlani, a managing director at Accenture and Asean Financial Services practice lead, said in an August research report.
Vithlani expects Singapore's forthcoming virtual banking licenses will attract an additional wave of investment. MAS's moved to greenlight internet banks after Hong Kong issued eight internet banking licenses earlier in 2019. The MAS said it had received 21 applicants for five digital banking licenses, two full banking licenses (retail and corporate) and three wholesale licenses, which can be used for non-retail banking only.
Going forward, the unrest roiling Hong Kong will likely result in more fintech investment going to Singapore. A 2019 survey of 120 companies by the American Chamber of Commerce in Hong Kong found that 23% of companies with a Hong Kong office may shift business functions from the city. 90% of them say Singapore is their first choice.
London-based Revolut, one of Europe's preeminent challenger banks, established its Asia headquarters in Singapore last year. We expect other major neobanks expanding to Asia from the West will follow suit.