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It was announced on June 10, 2020, that the Singapore FinTech Association has launched a new initiative to encourage fintech in the country. This is in the form of a self-assessment framework that will aid fintech firms in accelerating partnerships with financial institutions. This is also part of a larger S$125 million support package that the Central Bank of Singapore announced during April.
The package’s immediate purpose is to aid financial and fintech firms in navigating the challenges brought on by COVID-19. This new framework helps in that it allows the firms to demonstrate their compliance levels to banks. Despite this, they are still able to maintain control and consistency in their various services.
The framework stipulates some requirements initially put down by the Outsourced Service Providers Audit Report (OSPAR) guidelines. These are laid out by The Association of Banks in Singapore and the Technology Risk Management Consultation Paper and Cyber Hygiene Notice by the Monetary Authority of Singapore (MAS). Along with these, workshops from PwC will be available to close any gaps in compliance.
Besides the support package from the Central Bank last month, the Monetary Authority of Singapore launched a S$ 1.75 million MAS Global Fintech Innovation Challenge this month. The goal of this challenge was also to support businesses in light of COVID-19. It was also announced that the theme of the competition would be “Building Resilience, Seizing Opportunities, Emerging Stronger”.
The MAS has stated that they aim to help the transition to a new business environment post-Coronavirus and also promote green finance. The competition will source for fintech solutions for specific business sectors within the country. It will also be hosted entirely on API Exchange (APIX), which is a cloud-based innovation platform.
The competition itself will comprise of both the MAS Fintech Awards and the MAS Global Fintech Hackcelerator. The MAS fintech awards, which are supported by PwC, will feature two new categories- ASEAN Fintech and Singapore Financial Institution. Throughout the awards, 12 winners will be selected, and a combined prize of $1.2 million will be awarded.
The MAS Global Fintech Hackcelerator, on the other hand, aims to match fintech solutions with existing market needs. It comprises the Local Programme and the International Programme, which involves winners of international competitions. The Global FinTech Hackcelerator will present prizes of S$ 20,000 each to up to 20 finalists, with an additional 3 receiving S$50,000 each on Demo Day at the Singapore FinTech Festival.
It is no surprise that fintech is gaining traction within Singapore, as the country has been welcoming towards blockchain and cryptocurrency in the past. In 2019, the Monetary Authority of Singapore announced plans to introduce a framework for cryptocurrency exchanges. This would not be limited to payment services as the bill also took care to expand on the existing definition of e-money to include e-wallets.
The same month, the Inland Revenue Authority of Singapore (IRA) began collecting public comments on cryptocurrency taxation. This was in relation to a proposed bill that would make cryptocurrency exempt from the goods and services tax (GST). In the bill, cryptocurrencies such as Bitcoin, Ethereum, and Monero were cited as tokens that would be exempted.
Singapore is also considered a hub for security tokens within Asia. More recently, the Monetary Authority of Singapore created a regulatory sandbox to allow exchanges self-regulate. This comes after security tokens have fallen under both the Securities and Futures Act (SFA) and The Payment Services Act (PSA).
Do you think fintech will be the key to navigating a post-Coronavirus world? Will Singapore become the next great fintech hub? Let us know your thoughts below.