Singapore seeks coordinated and global approach to fintech

Noting that Singapore was an expected area or fintech to flourish due to its small market and good banking status, Mohanty stated that Singapore needed to think differently and act consistently: he credited the investment growth in Singapore to B2B fintechs, which have created infrastructure for established players to innovate faster. He pointed out that the demand to digitize at a rapid pace during the pandemic led to capital allocations and sustained growth.

Crypto was a major investment area in Singapore in 2022, Mohanty opined that this was in anticipation of support in the crypto industry due to the strong regulatory stance regarding digital assets in the island nation. In addition, he mentioned the scaling back of consumer protections in Singapore after several crypto failures have contributed to consumer confidence.

Mohanty advised fintech companies to rethink their business models as progressive policymakers and regulators will place disproportionate focus and capital behind digital public infrastructure:

“Governments are going to put a lot of capital into natural efficiencies in payment processing and lending to the public, whether it’s a payment tracker, data exchange platforms or digital consent systems. For example, Trade Network India has recently laid a lot of infrastructure in the e-commerce space, the SME space and the open connectivity data network. These infrastructures will find that many fintechs trying to learn the existing gap are having their business models questioned.”

This claim applied to the developing markets of Asia; Mohanty listed India, Indonesia, Japan and Thailand as examples. He emphasized that the shift in infrastructure and better connectivity between businesses will create innovation pathways that are the building blocks for the future.

Singapore has connected its payment systems to UPI in India, to Vietnam, Malaysia, and wants to connect to more countries before the end of the year. Mohanty’s said there were no borders or boundaries to Singapore’s collaboration: they are currently looking to connect countries in Africa and Latin America. Mohanty stated that there is a misplaced competition between fintech industries in different countries and that fintech should have no borders.

Commenting on the fintech industry in the UK, Mohanty added that the UK should consider a public infrastructure upgrade as there is a shift towards a global response to financial systems: “We have positioned ourselves as open, interoperable and open to a coordinated global response when it’s about financial systems. Recently we talked about unified public ledger and Singapore wants to connect to that. We’re talking about a coordinated response to digital currency: retail CBDCs, wholesale CBDCs and tokenized deposits. These are big macro strategies to think about when it comes to innovation. It’s all part of coordinated global thinking.”