Fintech in Singapore: Digital Banking and Sustainable Finance Set the Stage This 2022

Despite the global COVID-19 pandemic that upturned industries in its arrival and advancement, Singapore's local fintech landscape has managed to remain resilient.

Christian König, founder of Fintech News Network, said in the Singapore Fintech Report 2022 that the city-state has had an exciting year as its local fintechs companies have gone on to attract the biggest funding in the ASEAN.

Moreover, König reported that the Monetary Authority of Singapore (MAS) has allocated US$1.8 billion in funding as well as launched the Project Greenprint, putting the city-state on the road to becoming a green finance hub.

"With such strong regulatory backing, we are certain that Singapore will continue to blaze the trail for more innovation in the financial services space for years to come," König said.

The report, created by Fintech News Network and Alibaba Cloud, offers a detailed look into Singapore's fintech landscape, its trends amid COVID-19, and projections.

Digital Banking at the Forefront

PayNow

Users of PayNow surged during the pandemic. PayNow is a fund transfer service involving multiple banks in Singapore, allowing customers to send and receive Singapore Dollar funds from one bank or e-wallet account to another with just the use of a mobile number, one's Singapore NRIC/FIN, or Virtual Payment Address (VPA). As per the report, individual registrations in 2020 climbed to 1.6 million, bringing the total number of registrations to 4.9 million.

The Popularity of Digital Wallets

Digital wallets are also popular in Singapore. According to the 2021 Global Payments Report by FIS via the Singapore Fintech Report 2022, while credit cards were the most popular online payment method during the pandemic year in 2020, digital wallets are expected to overtake them as the most preferred online payment method by 2024. Buy now pay later (BNPL) options are expected to grow the fastest.

This is not surprising at all. According to a survey by FICO via the fintech report, it was shown that majority or 68% of Singaporeans prefer digital banking channels during financial hardships.

"The COVID-19 pandemic has forced customers to turn to digital channels and mobile banking, leading many of these incumbents to witness record growth levels over the past year," the fintech report said.

The Road to Green Finance

In its commitment to make Singapore a regional green finance hub, the MAS is engaged in these five areas to promote sustainable financing: environmental risk management; green financial solutions; green research and talent development; standardizing taxonomy; and funding of green fintech solutions and projects.

Under green financial solutions, MAS will designate US$1.8 billion of official foreign reserves to five asset managers of the Green Invest Programme (GIP). The United Overseas Bank Limited (UOB) has also launched a green financing solution for electric vehicle (EV) businesses and end-users.

"NTUC Income [has] expanded its coverage on electric vehicles (EVs) by offering new usage-based motor insurance (UBI) to EV owners," the fintech report also said. "The Singapore Exchange (SGX) has launched the world's first Environment, Social and Governance (ESG) real-estate investment trust (REIT) derivatives."