Singapore stands out among the fintech hubs within ASEAN, backed by a supportive regulatory regime, progressive policy initiatives and forward-thinking financial institutions, a new report states.

Singapore-based United Overseas Bank (UOB), with insights from EY, has produced a white paper titled «State of FinTech in ASEAN» that explores the factors driving the growth of fintech, including the region’s strong economic fundamentals, favourable demographics, digital readiness and regulatory support.

This might explain why investment in the Southeast Asian fintech market increased 33 per cent year on year to $252 million in 2016 and has already exceeded $338 million as at September 2017.

Funding Opportunities to Fuel Growth

Organized by the Monetary Authority of Singapore (MAS) and in partnership with the Association of Banks Singapore (ABS), «Deal Day» was held last week during the Singapore Fintech Festival (SFF). This summit saw over 1,000 fintechs and 400 investors from around the world submitting their interest to partake in a highly personalized matchmaking process to connect high potential startups with interested investors.

From the exercise, 3,542 unique matches were generated for a combined pool of over $2 billion in total funding, with the bulk of the participants coming from Singapore.

The popular areas of interest from an investment angle are data analytics (70 percent), blockchain (65 percent), lending applications (64 percent), payment solutions (61 percent) and regtech (56 percent).

One Than One Solution

In comparison, the top solutions offered by fintechs resonate quite closely with investors’ interests as they are similarly in the areas of payments (20 percent), lending (14 percent) and regtech (10 percent), with added focuses on robo advisors (14 percent) and trading and fund management (12 percent).

It is also worthy to note that each fintech typically offers more than one solution or product focus and majority of them (80 percent) require funding of less than $5 million.

Future State of Investment

The «Deal Day» insights were discussed at a roundtable with close to 30 investors, fintechs and financial services clients as they shared their views on «The future of Fintech investments – what’s the next big bet?». Interesting perspectives were shared around what they predict to be game changing technologies, including regtech, blockchain, wallets and ecommerce that would change the investment landscape in the next 12 months.

EY foresees that the appetite for fintech investments will grow though the right opportunity might not always present itself at the right time for these promising startups.

Continious Drive Towards Innovation

Cognizant that the startup journey can be a challenging one, especially for overseas firms looking to venture out of their home zone, EY has launched the ASEAN FinTech starter kit in line with the SFF.

«With our global fintech networks and unique propositions, EY is well positioned to play a vital role in the fintech eco system, which should be focused on collaboration amongst regulators, financial services players and fintechs to bring about convergence and financial inclusiveness,» Liew Nam Soon, EY ASEAN Managing Partner for Financial Services, said.

«The starter kit is one of such propositions that demonstrates our continuous drive towards innovation and commitment to help startups scale by giving them access to the right opportunities, knowledge, technology and networks,» he added.

Enabling Growth With the Right Support and Networks

The starter kit is a joint effort between EY and content partners like FinLab, Innoven, Merrill Corporation, Microsoft and UOB, who would like to play a part in shaping the fintech eco-system and help fuel the growth of fintechs in ASEAN.

It is an enabler to help high potential startups understand the different regulatory landscapes in each market, get access to funding and the right technological platforms, and leverage local networks to support customer acquisition efforts.