Singapore home to two in five ASEAN fintech startups
Firms are finding growth in SMEs that don't have access traditional bank services.
Two in five or 39% of ASEAN fintechs have picked Singapore as their home base, UOB said.
According to their State of FinTech in ASEAN report, Singapore’s developed financial infrastructure and supportive regulatory policies have positioned the country well to compete with other hubs, such as Hong Kong and London.
Indonesia, Malaysia and Thailand are fast catching up with Singapore as a preferred fintech home, supported by high levels of mobile adoption, rising rates of internet penetration and an increasingly urban, literate and young population.
UOB said 45% of consumers have already used non-bank financial services in the past 12 months.
Additionally, Singapore is part of the ASEAN countries which have high levels of bank penetration, rate low in regard to credit availability in the micro, small and medium-sized enterprise (MSME) sector.
Fintechs in the region are also exploiting this credit gap to offer services to this underserved segment, which is not the traditional target segment of financial institutions, UOB said.
Moreover, there 367 payment fintech startups in the ASEAN region as of 9 October 2017, where 102 or 28% are in the Lion City.
UOB forecasts the value of digital payments transactions in Singapore could hit US$21b by 2021 and have a compounded annual growth rate (CAGR) of 14.3% from 2017 to 2021.
Meanwhile, Singaporeans still show high trust towards their banks compared to their Western counterparts in the UK and US. About 60% said they have moderate trust, compared to 57% in the UK and 46% in the US.
Seven in 10 respondents said they still believe that banks have an important role to play in helping them achieve their life’s goals because of their expertise across all types of financial products.
Singapore is exempt in UOB's observation of ASEAN countries being in the early stage of their digital journey. It took the top place in the Network Readiness Index, distant from its neighbours which ranked between 60 and 80.