1 in 5 fintech firms think Singapore doesn't attract enough venture capital
These companies rely on Singapore to attract funds that will allow risk-taking.
Whilst 77% of fintechs in Singapore think there is enough venture capital (VC) to bag funds from, 23% still think there aren’t enough VCs in the country, EY revealed in its ASEAN Fintech Census for 2018.
“In Singapore, the government is seen to provide attractive incentives to VCs to encourage risk-taking, including reduction of regulatory red tape, protection of intellectual property and allocation of public money for early investments,” the report said.
Moreover, 59% of respondents said the government needs to prioritize making funds more accessible. Meanwhile, about 11% want better assistance schemes, 14% want a wider range of criteria, whilst 7% want increased funding. Respondents from Philippines and Singapore particularly gave high weight to funding, EY noted.
The survey also revealed that in Singapore, 33% said the government provides enough funding support - the highest amongst the Asian countries EY surveyed. However, a larger percentage of 66% still don’t think the support is high enough. About 39% of this majority said the government only provides a medium level of support for funding.
This could be a problem given that Singapore is considered Asia’s fintech hotspot and there are 490 companies currently in the country, EY said. Fintech investment in 2017 surged 68% YoY to US$141m. Wealth management, alternate lending, and payments are leading the way in fintech development in the country.
Singapore is also swamped with issues on lack of people. Companies in Singapore face relatively fewer challenges than the other Asian countries, albeit 7 out of 10 respondents still believe that there are issues in hiring the right talent.
“Singapore faces a shortage of product management skills,” the survey said. About 19% of firms said they lack people with this type of skill, followed by 14% in design. More than half or 53% of companies said they lack talent in tech and software, but this is not unique to Singapore, as all countries in the survey cite it as a top staff problem.
Thus, more than 90% of firms in Indonesia, Malaysia, and Singapore consider talent reforms as an important initiative.
The ASEAN countries surveyed are Cambodia, Brunei, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.