Singapore (VNA) - Singapore’s fintech sector has emerged as a beacon of innovation and growth within the Association of Southeast Asian Nations (ASEAN). However, over the past year, the fintech sector in Singapore encountered a significant funding slowdown following global trends, according to an article published on fintechnews.sg, a Singapore’s news site on January 18.
The 2023 FinTech in ASEAN report, which was jointly developed by UOB, PwC Singapore, and the Singapore Fintech Association, illuminates the current funding landscape globally and in the region. It reveals that Singapore accounted for an impressive 59% of the fintech funding in the ASEAN region last year, a substantial share amidst the downturn. However, the total funding in ASEAN was merely 1.3 billion USD, representing a scant 3% of global fintech funding, marking the region’s lowest in three years.
In ASEAN, the average funding amount among the top 10 funded firms saw a decline of more than half in 2023 to 94 million USD as the region saw only three mega deals valued at over 100 million USD, which accounted for close to 50% of total fintech funding in the sector. Those mega deals were led by Singapore fintech firms Advance Intelligence Group, Bolttech, and Indonesia’s Kredivo Holding.
Globally, the fintech sector grapples with the effect of economic uncertainties and high-interest rates, leading to a noticeable decline in funding. The total funding in 2023 amounted to 44 billion USD, fell short of the 58 billion USD recorded in 2020, the previous lowest year. Particularly, the six biggest ASEAN markets observed a steep 75% decline in investments, with the number of deals halving and average deal sizes reverting to levels seen prior to the COVID-19 pandemic.
In 2023, four out of the top five fintech funding deals in ASEAN were from Singapore, with the exception being the biggest deal going to alternative lender Kredivo’s Series D valued at 270 million USD. This diversification indicates a maturing market where investors are spreading their investments across different fintech solutions.
While Singapore and Indonesia dominate in ASEAN fintech funding, together accounting for a whopping 86% of the regional pie, other countries like Vietnam and Malaysia are also creeping up as slightly more notable contributors.
According to the article, Singapore has developed a robust ecosystem that supports fintech innovation through favourable regulations, a skilled workforce, and a culture of entrepreneurship. This ecosystem has enabled the country to attract not only funding but also talent and technology, reinforcing its status as a fintech hub.
Singapore’s fintech sector, mirroring global trends, is navigating a challenging funding landscape characterised by a downturn in investment. However, the nation’s significant influence in the ASEAN fintech funding arena, coupled with its robust ecosystem and sturdy regulatory oversight, positions it well to weather these challenges, it said./.
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