The accelerating regulatory activity underlines the importance of financial technology innovation to the two small jurisdictions, both of which want to become the undisputed financial hub of Asia.
In its latest move, the Monetary Authority of Singapore (MAS) signed separate fintech cooperation agreements with Korea’s Financial Services Commission (FSC) and India’s Government of Andhra Pradesh (GOAP) in October.
The MAS and the FSC will explore potential joint innovation projects on technologies such as big data and mobile payments, according to an MAS statement.
“Singapore’s vibrant fintech ecosystem, sound infrastructure and growing talent pool make it a natural choice for Korean fintech companies looking to expand their business to neighbouring markets,” Sopnendu Mohanty, MAS’ chief fintech officer, said in the statement.
Meanwhile, the MAS and the GOAP will explore technology projects in digital payments and blockchain, and collaborate on the development of fintech education programmes, according to an earlier MAS statement.
The agreements follow a series of MAS initiatives to further drive fintech development in Singapore. Earlier this year, the regulator signed separate fintech agreements with the UK and Australia.
The MAS also opened a fintech lab in August that aims to bring in industry experts to consult with start-ups on legal, regulatory and business matters as well as provide a place to network and offer training sessions.
Hong Kong investment surge
A study on fintech hubs published by Deloitte in September found that Hong Kong ranked fourth globally among 21 global hubs Deloitte surveyed.
The study, which calculates an “aggregate index performance score”, also found that Singapore’s score was tied with London’s as the highest score.
However, Hong Kong’s proximity to China makes it hard for other fintech hubs to displace the city, according to the report. Hong Kong provides a base for outbound mainland Chinese companies to scale in Asia and potentially expand into Europe through acquisitions.
In addition, industry organisation ICI Global believes fintech disruption is likely to come from China, FSA reported earlier.
In terms of investment capital, Hong Kong attracted nearly 5x more fintech investment ($165m) than Singapore ($35m) as of end-July, according to an Accenture study.
The SAR has also stepped up its fintech development efforts. Among them, a fintech supervisory sandbox, which allows banks to experiment with fintech solutions without full compliance. A fintech innovation hub is also expected to open within this year.
Despite these advantages, the competition continues. The Deloitte report found that Singapore scored better than Hong Kong in terms of government support, innovation culture, proximity to expertise and to customers and regulation.
