SINGAPORE: New technology firms and traditional financial institutions are increasingly working together to enhance efficiency in the sector, as the Monetary Authority of Singapore (MAS) takes new measures to help drive the financial technology (fintech) ecosystem.
However, observers have said regulating the industry could be challenging.
Dragon Wealth, an online platform which connects financial advisers and investors, is an example of how the finance industry is leveraging technology. It went online just two months ago and it has already attracted about 35,000 users. There are more than 130 financial advisers from 26 financial advisory firms in Singapore with Dragon Wealth, and about 650 more advisers are waiting to come on board.
"We're not about replacing financial advisers, as they play fantastic role in the market,” said Mr Bert-Jan Van Essen, CEO and founder of Dragon Wealth. “What they need to have is, in the back, they need to be better supported by marketing and sales capabilities to do their job more efficiently. To get more prospects faster, and to have more efficient meetings with their clients so that they can manage a set of up to 500 clients."
MAS recently formed a group that would look into how it can facilitate the use of technology and innovation in the finance industry. It plans to invest S$225 million over the next five years in the sector. Observers said the support from MAS can boost Singapore’s fintech scene.
"They have now suddenly become an incubator and facilitator of digital and innovation. That will help the banks quite a bit,” said Mr Cyrus Daruwala, managing director of IDC Financial Insights. “They're using this co-funding pool to test things where they were earlier very cautious. Because banking after all is a business, they can't take these risks, but now they have reason to. So I think Singapore would become a test bed for innovation transformation, competing with Hong Kong, China and India."
Still, experts said regulating the sector could remain challenging.
“The challenge for regulators, whether it's the MAS or anyone around the world, is to get their arms around this,” said Mr Antony Eldridge, financial services leader at PwC Singapore. “We're going to see regulators pivot away from looking at regulating institutions in themselves, to really looking at regulating products and services wherever they may be, or wherever they may pop up. I think that's the challenge. I don't think anyone has got the complete answer yet because speed of change is so rapid."
According to statistics from Statista, the total investment into fintech globally last year hit US$6.8 billion.