SINGAPORE (Nov 12): Financial technology firms in Singapore continue to grab the lion’s share of funding in Asean, according to a report by United Overseas Bank (UOB), PwC and the Singapore FinTech Association (SFA).
According to the report, “FinTech in Asean: From Start-up to Scale-up”, fintech companies here received 51% of funding for the region.
Singapore also tops Asean as a preferred base, being home to 45% of all fintech firms in the regional bloc.
These firms saw funding are spread out evenly compared to other countries in Asean, with insurance technology, payments and personal finance firms led the way.
This development also indicates a mature fintech landscape in Singapore compared to other Asean markets.
“Singapore’s favourable regulatory and business environment, strong investor interest and maturing fintech sector continue to make it an attractive base for firms that are looking to tap Asean’s growth potential. As such, more firms in the country have also graduated from pre-series to later-stage funding,” said Janet Young, Head, Group Channels and Digitalisation, UOB.
“However, expanding into and within one of the world’s most diverse regions is not plain sailing. Therefore, in order to increase their chances of success, it is important for fintech firms to find the right partner to supplement the experience, insights and connections required to navigate the differing regulatory frameworks and operating landscape across Asean,” she added.
Some 79% of fintech firms surveyed say they are mainly targeting businesses.
Financial institutions made up half of the businesses targeted, followed by corporates (17%) and small and medium enterprises (12%). The remaining targeted consumers and start-ups.
With longer time spent in getting multi-level approvals, fintech firms targeting FIs and corporates need to prepare a longer funding runway as they deal with long lead times before a deal is sealed.
Fintech firms, however, are optimistic about their future, with almost half confident of raising more than US$10 million ($13 million) in their next funding round.
However, talent remains a challenge, with 58% saying that it was an inhibitor to their regional expansion plans.
“The increasing penetration of mobile devices coupled with the capabilities of new innovative technologies have made fintech firms a key driver in this evolving Asean financial services landscape, providing an experience that is easier, faster and more convenient. That being said, the fintech scene is very competitive so fintech firms should be focused and have a clear value proposition,” said Wong Wanyi, FinTech Leader, PwC Singapore.
“Fintech firms need to consider if there is suitable and abundant expertise at the location they have chosen to scale their business. Given the long time it takes to hire the right talent, firms must plan ahead when it comes to expanding their workforce and business in a new market,” said Chia Hock Lai, President, SFA.
