Displaying items by tag: singapore

Hong Kong as Asia’s top crypto hub? Really? That is our reaction to the speculation that the Chinese SAR could beat out Singapore for Asia’s crypto crown that has emerged since Hong Kong officials at Hong Kong Fintech Week announced a public consultation on how retail investors could have a suitable degree of access to digital assets under a new licensing regime. Rules currently limit crypto trades to institutional investors with a portfolio of at least HK$8mn ($1mn). Yet it is hard to see how Hong Kong can chart such a markedly different course on crypto than mainland China.

Published in Blockchain Research

The Covid-19 pandemic has created a new normal that is affecting the livelihoods of billions of consumers and businesses globally. Singapore is no exception as the fintech industry faces unprecedented challenges. However, the Singapore government has been very supportive of the industry and there are a number of public and private initiatives that have been launched to help the industry along. As part of Kapronasia's work to help companies through this time, please do not hesitate to reach out for a conversation of how we might be able to help your business weather this time. As a Singapore-based firm, we are able to work through many of the programs that are listed below which provides clients with the same Kapronasia quality at often a much lower cost through grants and incentives.

Summary of Programs

The Monetary Authority of Singapore (MAS) threw FinTechs a lifeline in April following a survey of Singapore FinTech Association (SFA) members which found that 47.8% of respondents felt that Covid-19 has had a significant impact on their business.

As part of the S$125 million “Covid-19 FinTech Care Package,” funded by the Financial Sector Development Fund, the MAS announced a new Digital Acceleration Grant (DAG) under the Financial Sector Technology and Innovation (FSTI) scheme. The DAG seeks to help smaller financial institutions (FIs) and FinTech firms in adopting, customizing, or collaborating on digitalization projects to streamline processes and deepen capabilities.

The DAG scheme consists of two tracks: The Institution Project track and the Industry Pilot track.

The Institution Project track supports the adoption of digital solutions to improve operational resilience, enhance productivity, manage risks more effectively and/or serve customers better. Eligible FIs and FinTechs are entitled to 80% of qualifying expenses up to a cap of S$120,000 per entity over the duration of the scheme.

The Industry Pilot track supports collaborations among at least three smaller Singapore-based FIs to customize digital solutions for implementation within their institutions, by co-funding 80% of qualifying expenses, capped at S$100,000 per participating FI per project.

The MAS’ Covid-19 FinTech Care Package consists of three main components. The DAG scheme falls under “strengthening digitalization and operational resilience.” The other two main components of the MAS support package are:

Supporting workforce training and manpower costs: Under this component of the package, the MAS will launch a new Training Allowance Grant (TAG) to encourage FIs and FinTech firms to train and deepen the capabilities of their employees. Self-sponsored individuals and employees at FIs and FinTechs can apply to receive a training allowance and subsidized course fees, while FIs are also eligible to receive a salary grant under the Finance Associate Management Scheme (FAMS).

Enhancing FinTech firms’ access to digital platforms and tools: Under this component of the package, the MAS will provide all Singapore-based FinTech firms six months’ free access to the API Exchange (APIX), an online global marketplace and sandbox for collaboration and sales. The MAS will also work with the SFA to set up a new digital self-assessment framework for MAS’ Outsourcing and Technology Risk Management (TRM) Guidelines hosted on APIX. Completing the self-assessment will help FinTech firms provide a first-level assurance to FIs about the quality of their solutions.

MAS-SFA-AMTD FinTech Solidarity Grant

In a separate initiative introduced in May, The MAS, SFA, and AMTD established a S$6 million MAS-SFA-AMTD FinTech Solidarity Grant to support Singapore-based FinTech companies amid the Covid-19 pandemic. The grant will help FinTechs manage their cashflow better, support them in generating new businesses, and provide greater support for FinTechs to pursue growth strategies.

The grant is made up for two parts:

The Business Sustenance Grant seeks to tide over Singapore-based FinTechs during this Covid-19 period and save jobs. It offers both wage and rental support.

The Business Growth Grant aims to foster the continued growth of Singapore-based FinTech companies and help these companies offset their POC costs. The grant offers 70% of qualifying costs related to the POC on APIX, as well as 100% internship funding for interns involved in the development and implementation of the POCs.

Published in Asia Banking Research

Singapore-based Arival Bank is one of the less high-profile applicants for a digital bank license in the city-state. It's easy to get lost in the crowd when you're competing against names like Ant Financial, Xiaomi and ByteDance. Arival Bank, a fintech startup, has applied for the same digital wholesale bank (DWB) license as those Chinese tech giants. In a nutshell, that license allows the holder to serve non-retail clients in Singapore. The Monetary Authority of Singapore (MAS) has said it would issue three DWB licenses.

Published in Asia Banking Research

The competition for Singapore digital banking licenses is heating up as yet another fintech throws its hat into the ring. This time, the contender is homegrown fintech MatchMove which is applying for a digital full-bank (DFB) license together with Singapura Finance, the Thai blockchain startup LightNet and the London fintech startup OpenPayd. There are only two DFB licenses up for grabs. They allow licensees to conduct both retail and corporate banking. Digital wholesale bank (DWB) licenses are valid only for non-retail banking.

Published in Asia Banking Research

Gaming company Razer isn't the most obvious shoo-in for one of Singapore's digital banking licenses, but has unique advantages it brings to the table. Those include a user base 80 million strong primarily composed of millennials, one of the key target demographics of neobanks. Razer established a fintech unit in 2018 to respond to the need for in-game payment. If it gets the license, Razer wants to expand its digital banking services beyond East Asia to the Middle East, Europe and North America. 

Published in Asia Banking Research

The Monetary Authority of Singapore (MAS) announced on 28 January of the enforcement of a new Payment Services Act, the first comprehensive legislation of its kind that regulates distinct activities in payment services ranging from digital payments to the trading of cryptocurrency such as Bitcoin and Ether.

The Payment Services Act comes at a well-coordinated time before the MAS awards a total of five digital bank licenses to a select few of its 21 reported applicants. While that may be the case, some have begun to speculate on the effects and ramifications the Act will have on fintechs that are hoping to or have already begun operations in Singapore.

Published in Asia Banking Research

Singapore has never been as large a financial center as Hong Kong. In every major traditional area of finance, Hong Kong has an edge. That is not the case in fintech, where Singapore's Asean location is a boon. The world's preeminent tech giants and venture capitalists have all descended on Southeast Asia, where the underbanked are legion, regulators are keen to boost financial inclusion, and consumers are digitally adroit. Singapore is ideally positioned to take advantage of this opportunity. 

Published in Asia Banking Research

Southeast Asian ride-hailing giants Grab and Gojek aim to reinvent themselves as digital banks amidst rising concern about profitability among cash-burning tech startups. Becoming a profitable digital bank is the only way either of the companies will have a crack at super-app status. Bundling ride hailing, food delivery, plus other odds and ends won't do the trick. China's WeChat - the world's first and only super app to date - cemented its dominance by introducing a handy e-wallet and later building out a more comprehensive suite of digital banking services.

Published in Asia Banking Research

In 2019, the Asian tiger economies cautiously welcomed virtual banks. The financial centers of Hong Kong and Singapore as well as the advanced manufacturing hubs of Taiwan and South Korea can all benefit from digital-first competition in their respective financial sectors, where incumbents dominate. That has led to some complacency.  

Published in Asia Banking Research

With an eye on going public, Singapore's ride-hailing giant Grab needs to show profitability, or failing that, strong potential to be in the black soon. Serving as a high tech taxi or food delivery service no longer looks like it will be enough for investors. Instead, Grab wants to be a go-to digital bank. If Singapore regulators grant Grab a virtual-banking license, the company will be poised to test out its fintech hypothesis in its home market.

Published in Asia Banking Research
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