Singapore (VNA) -Singapore’s fintech sector has emerged as a beacon of innovation and growthwithin the Association of Southeast Asian Nations (ASEAN). However, overthe past year, the fintech sector in Singapore encountered a significantfunding slowdown following global trends, according to an article published on fintechnews.sg,a Singapore’s news site on January 18.
The 2023 FinTech in ASEANreport, which was jointly developed by UOB, PwC Singapore, and the SingaporeFintech Association, illuminates the current funding landscape globally and inthe region. It reveals that Singapore accounted for an impressive 59% of thefintech funding in the ASEAN region last year, a substantial share amidst thedownturn. However, the total funding in ASEAN was merely 1.3 billion USD,representing a scant 3% of global fintech funding, marking the region’s lowestin three years.
In ASEAN, the average fundingamount among the top 10 funded firms saw a decline of more than half in 2023 to94 million USD as the region saw only three mega deals valued at over 100million USD, which accounted for close to 50% of total fintech funding in thesector. Those mega deals were led by Singapore fintech firms AdvanceIntelligence Group, Bolttech, and Indonesia’s Kredivo Holding.
Globally, the fintech sectorgrapples with the effect of economic uncertainties and high-interestrates, leading to a noticeable decline in funding. The total funding in 2023amounted to 44 billion USD, fell short of the 58 billion USD recorded in 2020,the previous lowest year. Particularly, the six biggest ASEAN markets observeda steep 75% decline in investments, with the number of deals halving andaverage deal sizes reverting to levels seen prior to the COVID-19 pandemic.
In 2023, four out of the topfive fintech funding deals in ASEAN were from Singapore, with the exceptionbeing the biggest deal going to alternative lender Kredivo’s Series D valued at270 million USD. This diversification indicates a maturing market whereinvestors are spreading their investments across different fintech solutions.
While Singapore and Indonesiadominate in ASEAN fintech funding, together accounting for a whopping 86% ofthe regional pie, other countries like Vietnam and Malaysia are also creepingup as slightly more notable contributors.
According to the article, Singapore has developed a robust ecosystem that supports fintech innovationthrough favourable regulations, a skilled workforce, and a culture ofentrepreneurship. This ecosystem has enabled the country to attract not onlyfunding but also talent and technology, reinforcing its status as a fintechhub.
Singapore’s fintech sector,mirroring global trends, is navigating a challenging funding landscapecharacterised by a downturn in investment. However, the nation’s significantinfluence in the ASEAN fintech funding arena, coupled with its robust ecosystemand sturdy regulatory oversight, positions it well to weather these challenges, it said./.
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