Over the years Singapore has emerged as an innovation hub. With several big companies swiftly moving to Singapore and setting up camps, it is sure to be in the race to become the next Silicon Valley. But technology and innovation are not the only things that are taking the shores of Singapore by storm. Fintech in Singapore is another success story everyone has been talking about.
In recent years, we can see a rise in the number of aspiring FinTech start-ups as well as FinTech giants ready to set up their operations in Singapore. After business and logistics, the island nation is all set to be a Fintech leader in Asia.
But any nation can’t do much in any particular sector until it has strong support, especially from the government. Luckily for Singapore, the government has promoted growth in the FinTech and Digital Asset sectors by establishing a helpful support system in a short period of time.
This growth has also paved a way for new technological advancements and a spike in blockchain applications. In this article, we will discuss how blockchain technology has been dominating the fintech industry in Singapore.
But before that, let’s take a look at the FinTech ecosystem in Singapore.
Fintech Ecosystem in Singapore
FinTech in Singapore has developed at a fast rate. In 2015, the nation’s fintech firm count was only around 100. But it spiked with time and within the period of just five years, in 2020, there were more than a thousand new firms.
If you are a FinTech entrepreneur, there is a lot you can learn from Singapore’s FinTech ecosystem. Here are some factors that helped Singapore reach the new dimensions for success in FinTech.
Today digital technologies have taken over Singapore. Along with the government’s effort to strengthen digital literacy, the population has also been showing a keen interest and is becoming tech-savvy.
This high rate of tech literacy has led people to accept all the new digital innovations. Hence the FinTech companies in Singapore have the surety of demand and can grow further.
The government of Singapore has implemented strategies to increase FinTech talent. As it is a leading education hub, the universities and colleges will be seen incorporating more and more FinTech plans.
We can expect an increased supply of qualified FinTech talents in the years to come.
3. Supportive Public, Private and Financial Sectors
The wide availability of capital for early-stage investment is supported in the private sector. Besides the government, there is a large scope of funding from sources like angels, venture capital, and corporate venture divisions.
Disruption in the Finance Technology
Fintech is an ever-evolving industry since it is tech-oriented and in technology, there are constant advancements and breakthroughs.
We see different finance apps offering new and innovative approaches to payments and transactions. Many companies are venturing into web development and apps that make your finances easy.
But what is it that’s dominating the Fintech industry singlehandedly? A technology that has a great impact on the finance industry is Blockchain Technology.
Although known for cryptocurrencies like Bitcoin, blockchain’s applications are continually expanding into new areas of finance and it has the potential to completely change FinTech forever.
Blockchain Technology Dominating Fintech Industry in Singapore
2020 was the year of blockchain technology. Not only did it make waves for its applications for cryptocurrencies but also turned out to be a game-changer for FinTech. The popularity of Blockchain technology was so much that Singapore set out a S$12 million blockchain research program.
The main goal of this program was to accelerate the development and adoption of Blockchain technology. It further worked on engaging up to 75 companies to work on 17 blockchain-related projects in sectors starting with trade and logistics and supply chain.
And it continues to soar high in 2021. According to Singapore fintech report 2021, Blockchain technology completely dominated the FinTech scene.
Out of the 430 fintech startups in Singapore, 19% operate in the blockchain and cryptocurrency vertical. It was closely followed by payments (16%), investments, and wealth tech (14%).
Why is Blockchain Technology Game-Changing for FinTech?
There is more than one reason why Blockchain has completely transformed FinTech in Singapore and in general. This technology has provided an opportunity of developing an entire fintech apps ecosystem.
It has the capability of transforming daily financial processes and making them transparent secure and efficient. Moreover, it has the potential to completely democratize finances and give users full control of their money.
Some of the ways in which Blockchain can completely transform FinTech in Singapore and globally.
1. Secure Payments
The transactions and KYCs using Blockchain can be way more secure. Know-your-customer procedures will become simple as a single digital entry. These will be secured and distributed across the network in order to eliminate any multiple entries and verification issues.
These security improvements will be especially helpful for sectors such as retail banking, investment banking, payment networks, and many more.
2. A Bankless Future
As Blockchain will be able to users complete control of their money, the future can be bankless. This has already started showing effect in the present. People dealing with cryptocurrencies are the biggest example of bankless transactions.
Blockchain digital wallets are protected by private keys. They have their very own unique public address that is used during sending and receiving payments and hence making it highly secure.
3. International Transactions
One other useful advantage of Blockchain is cheaper and faster international transactions. The technology can make way for more straightforward payments while costing less to make transfers between accounts.
This is because Blockchain transfers don’t need authorization by middlemen, and so the banks don’t have any need to use resources in order to transfer funds. That’s why the processing fees for international payments are far less than for bank transactions.
Blockchain technology is a tech that is just getting started. In the years to come, we will see several new implementations and applications of this technology in the finance ecosystem.
As of now it has already caught pace in Singapore and is ready to take over the global financial markets as well.
If you are looking forward to venturing into FinTech and building your own finance app integrated with blockchain, our digital product design agency can help you build a market-fit fintech app. We have a team of developers experts in Blockchain technology who will deliver innovative and secure solutions.