According to one of the Singapore’s financial technology sector is all set to boom, with a market size that is expected to almost double in value to US$10 billion or S$13.2 billion in three years, said HSBC’s chief digital officer for ASEAN, Shayan Hazir. It would mean a rise of over five times the US$4.1 billion that was invested in 2022. The country’s fintech companies are also expected to increase from around 1,500 to 3,000 which should further cement Singapore’s status as one of the world’s most important fintech hubs.
Hazir said that traditional banks, and fintech companies, would be able to collaborate, as there was potential for partnership between them, and the “existence of such partnerships could spur innovation and accelerate sector growth.” These alliances could take various forms, including equity investments or joint ventures, helping fintech firms scale while leveraging the banks’ resources and customer bases. One notable example is the recent US$50 million loan extended to Singapore-based fintech Validus under HSBC’s ASEAN growth fund strategy, aimed at supporting micro, small, and medium-sized enterprises.
Despite what has really become a challenging global investment environment, with venture capital funding essentially drying up in recent months, Hazir was optimistic about the future. The global fintech sector has endured another quarter of investment decline, with KPMG’s Pulse of Fintech report for H1 2024 revealing the “worst decline since 2020” into a funding trough at US$51.9 billion. However, from the perspective of eased inflation and lower interest rates coming from central banks, the 2025 horizon might look more promising-as an explosion of investment in the fintech sector.
As Hazir explained, for instance, scaling, product commercialization, and sustains in fintech firms go hand in hand: they need to transform their way of working. Some get advice on imitating banks on risk management and regulation and governance. To be reciprocal, banks can learn from the velocity and innovation of fintech.
As the fintech market expands in Singapore, Singapore is now regarded as competition by other international fintech hubs, such as those in the US and UK.
