Singaporean fintechs attract the most funding in ASEAN – report

Singaporean fintechs attract the most funding in ASEAN – report | Insurance Business

Singaporean fintechs attract the most funding in ASEAN – report

Financial technology firms in Singapore attract the lion’s share of global funding among ASEAN countries, receiving more than half (51%) of funding for the region, a report by United Overseas Bank (UOB), PwC, and the Singapore Fintech Association (SFA) found.

The report, titled ‘FinTech in ASEAN: From Start-up to Scale-up’, also found that Singapore tops the region as the preferred base of fintech firms, and is home to 45% of all fintech firms in ASEAN.

This, the report said, is testament to Singapore’s push to encourage fintech innovation across a broad range of areas, with funding for Singapore-based fintech firms being the most evenly distributed, with insurance technology, payments, and personal finance leading the way. Furthermore, the report said that the diversified funding also indicates the country’s more mature fintech landscape, compared with other ASEAN markets where the fintech sector is still nascent and is largely focused on payment-related solutions.

“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 of group channels and digitalisation, UOB.

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According to the study, businesses were the main target customer segment for fintech firms (79%), half of which are financial institutions. Consumers and start-ups made up the rest of the target segment (21%).

As most financial institutions and corporates tend to require multi-level approvals across different stakeholders, fintech firms need to be prepared for a longer lead time before sealing the deal and onboarding these clients, the report said. As such, fintech firms offering business-to-business solutions must ensure that they have a longer funding runway to meet their operating expenses.

The report also found that fintech firms in ASEAN are generally optimistic about their current and future funding needs, with almost half of those surveyed confident of raising more than US$10 million for their next funding round.

“This optimism is not surprising, given the promise that the ASEAN region brings and the liberation of the industry through digital banking licenses,” Wong Wanyi, fintech leader at PwC Singapore, said. “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. Scaling up should be at the right pace and for the right reason.”