FinTech Plays a Crucial Role in Singapore’s Economy
F10 FinTech Incubator & Accelerator will hold the first FinTech Hackathon in Singapore in September 2018. F10’s aim in organizing the 48-hour event in Singapore is to bridge the gap between the Swiss and Asian FinTech ecosystems.
Despite being small countries, both Switzerland and Singapore are renowned for a high degree of innovation. In 2018, Switzerland has been ranked number one by the Global Innovation Index for the eighth year in a row while Singapore is the most innovative country in the world outside Europe and ranked fifth in this year’s ranking. According to the Business Times, the Southeast-Asian state was “the best performer for political stability and safety, market capitalisation, foreign direct investment inflows, high and medium-high tech manufacturing and high-tech net exports.” Switzerland on the other hand scores particularly high in the category ‘knowledge and technology outputs’ as the Swiss have the highest ratio of European patent applications to population. One goal of the F10 FinTech Hackathon in Singapore is to join forces in technological innovation and facilitate an exchange between experts in FinTech.
Singapore is Switzerland’s most important trading partner in South East Asia and the Federal Department of Foreign Affairs states that “Singapore and Switzerland enjoy excellent relations.” Over 400 Swiss companies, particularly software companies and banks specialising in wealth management or private banking, have a regional office in Singapore thanks to the favourable conditions they are offered. The sponsors of the F10 FinTech Hackathon SIX (the Swiss Stock Exchange), Julius Baer, Zuhlke, and ERI Bancaire have regional offices in the city-state and play an important part in bridging the gap between Asia’s and Switzerland’s FinTech ecosystems.
Financial stability is a key prerequisite for the functioning of a national economy and an investment-friendly environment. Switzerland is one of the world’s most stable economies with the Swiss franc being one of the strongest currencies and Singapore’s financial system is also highly stable, the International Monetary Fund finds. Of particular relevance for the Swiss as well as the Singaporean economy is the finance industry. In Singapore, the financial services sector grew 4.9 percent in 2017, according to the Monetary Authority of Singapore (MAS). Ravi Menon, head of the MAS, said in a speech that “the growth momentum has been sustained in the first half of this year and we are looking at another good year for financial services.” He further stated that Asian economies were in a stronger position to absorb financial shocks than other regions of the world. “Foreign reserves and bank capital buffers are larger, while financial regulatory frameworks are more robust. In addition, policymakers in Asia are more prepared to make macro-policy adjustments as needed”, Ravi Menon explained at the media conference where the MAS annual report was presented.
Nearly one quarter of new jobs in the finance industry created by FinTech
Singapore saw a net increase of 7,800 jobs in financial services in 2016 and 2017, as stated in the MAS report. “IT has emerged as a key functional area driving hiring demand across financial services. Some of the fastest growing job roles are in software development, cyber security, data analytics, artificial intelligence, as well as business process engineering and FinTech alone is estimated to have contributed close to 2,000 of the net jobs created during these two years”, Ravi Menon said. In Singapore, 210 Startups operate in the FinTech area (count from the end of 2017), while there have been counted 264 FinTech Startups in in Switzerland as of July this year.
PwC’s global FinTech survey 2017 found that more players of Singapore’s finance industry see FinTech as an opportunity to differentiate their services and gain a stronger competitive advantage than their global peers. To support the growth of Singapore’s FinTech sector and help companies bring their finance technology innovations to the market more rapidly, the Intellectual Property Office of Singapore (IPOS) launched the so-called FinTech Fast Track initiative which provides expedited patent application-to-grant processes for FinTech inventions in April 2018. “Singapore is a place where great ideas from anywhere in the world can be commercialised. By significantly reducing the time needed to grant a FinTech patent, our innovative enterprises will be able to compete effectively through their intellectual property and use these intellectual assets to scale up and enter the world’s market”, IPOS Chief Executive Daren Tang was quoted by Fintechnews Singapore.
Worldwide number one in FinTech cooperation agreements
In the PwC survey, 89 percent of the Singaporean respondents – from both financial institutions and FinTech companies – expected to increase FinTech partnerships in the next three to five years. The first half of 2018 was marked by several collaborations and partnerships that are aimed at bridging FinTech ecosystems between Singapore and other jurisdictions, writes Fintechnews Singapore. The latest partnership is the deal between the Singapore FinTech Association and the FinTech Association of Japan announced in March this year. At government level, a partnership was signed earlier this summer between government agencies from India and Singapore to boost cooperation in financial innovation with focus on cross-border payments. According to Fintechnews Singapore, India’s Department of Economic Affairs, the government of India, and MAS will establish a joint working group. MAS has also formed partnerships with the State Bank of Vietnam, the Central Bank of Egypt, and the Bank of Lithuania as well as signed numerous bilateral FinTech agreements with Hong Kong, the UK, and Australia. The MAS has signed more FinTech cooperation agreements than any other regulatory body in the world.
As written in a Business Times article, the MAS furthermore encourages collaborations between FinTech companies and financial institutions, “as smaller Startups use more agile technology to fix some deep plumbing issues plaguing traditional banks and insurers”. F10 FinTech Incubator & Accelerator has the same goal and provides financial institutions access to the most promising international FinTech Startups, radically new technologies, and business models. The F10 Accelerator Programs have been designed for financial firms that want to reach the next level of innovation. They ultimately reduce corporations’ risks of being disrupted by new market players and to stay ahead of the fast-paced changes in the financial industry. At the Hackathon in Singapore, F10 is looking for talents beyond national borders to boost innovation, bundle the forces, and use the synergies between the Swiss and Asian ecosystems.
The best performing teams can win a golden ticket for the F10 Accelerator’s Top 25 selection of the “Prototype to Product” program and have the opportunity to become one of the Startups that are guided and supported on their journey to successful companies with sellable products or services and paying customers. The program members receive six months of training in Zurich, in close collaboration with specialists and experts from various fields.