In 2024, Singapore continued to solidify its position as a global fintech leader. The year saw nearly universal adoption of cashless payments and milestones in cross-border payment linkage initiatives, notably through Project Nexus. (fintechnews.sg)

New crypto regulations came into effect, introducing requirements relating to anti-money laundering (AML) and countering the financing of terrorism (CFT) and financial stability, and reflecting Singapore’s commitment to fostering innovation in the crypto and tokenization space.

Emerging technologies such as artificial intelligence (AI) and blockchain are being adopted at a fast pace, with generative AI becoming a critical tool for financial institutions.

Finally, the fintech startup ecosystem continued to diversify, a trend which is evident in the rapid growth of Web 3.0, insurtech and ESGtech verticals, supported by regulatory guidance and targeted incentives, and which reflects the sector’s increasing maturity.

Cross border payments and digital advances in Singapore

Singapore has made advancements in digital payments and emerging challenges in cross-border interoperability. Over 90% of the population has signed up for the nation’s digital payment schemes, and nearly all merchants—approaching 100%—have adopted QR code payment systems, according to Chia Der Jiun, Managing Director of the Monetary Authority of Singapore (MAS).

On the international front, Singapore has also made progress in cross-border payment linkages with countries including Thailand, Cambodia, Malaysia and India. However, these bilateral linkages are resource-intensive, a challenge that’s being addressed through Project Nexus. Project Nexus is a collaborative initiative with the Bank for International Settlements (BIS) that aims to create a multilateral framework and enable a country’s instant payment system to seamlessly connect with those of other nations through a single, streamlined integration.

Singapore Deepens in Tokenisation Efforts

In April, MAS expanded the scope of regulated payment services, introducing requirements relating to anti-money laundering and countering the financing of terrorism, user protection and financial stability on digital payment token service providers.

These amendments to the Payment Services Act (PS Act) bring several activities within the scope of the framework, including the provision of custodial services for digital payment tokens and the facilitation of the transmission of these tokens between accounts and facilitation of the exchange of them.

These regulatory advancements align with Singapore’s efforts to accelerate tokenization. Key MAS initiatives driving this acceleration include:

• The Guardian Wholesale Network Industry Group, a commercial network supporting the scaling of asset tokenization trials;
• The Global Layer One (GL1) initiative, which aims to foster the development of a public permissioned foundational digital infrastructure, upon which commercial networks could be deployed;
• The Guardian Fixed Income Framework, which integrates the bond data taxonomy, token standards and design principles for tokenized securities, allowing for a standardized approach towards tokenization in the fixed income market;
• The Guardian Funds Framework, which provides recommendations for establishing a framework for the tokenization of the fund lifecycle and activities; and
• The Singapore Dollar (SGD) Testnet, which enables financial institutions’ access to common settlement assets for market testing purposes.

Fueling fintech growth through financial support and talent development

2024 also saw the Singapore government launch several initiatives to solidify its global fintech leadership. These initiatives include:

• A SG$2 billion boost to the Financial Sector Development Fund (FSDF): This funding aims to accelerate technology adoption, support talent development, and upskill the workforce to meet the demands of the fintech industry.
• A commitment of SG$3 billion to the Research, Innovation, and Enterprise 2025 (RIE2025) plan: This boost aims to sustain investments in research, innovation and enterprise at about 1% of gross domestic product (GDP).
• Enhanced Enterprise Financing Scheme (EFS): The EFS has been updated to better support operational cash flow needs, with the maximum loan quantum raised to SG$500,000.
• Enhanced PACT Programme for SMEs and Startups: The enhancement of this program is a strategic move designed to directly confront and mitigate the hurdles small and medium enterprises (SMEs) and startups face in today’s competitive marketplace by fostering partnerships between large corporations and smaller firms.
• Expanded SkillsFuture initiative: This initiative focuses on upskilling the workforce to meet the evolving demands of the fintech industry.

Fintech industry sees increased adoption of technology

Singapore’s fintech sector is embracing transformative technologies such as artificial intelligence (AI), blockchain and quantum computing.

According to a survey of over 160 Singapore fintech firms by PwC Singapore and Singapore Fintech Association (SFA), 43% of respondents have prioritized emerging technologies, ensuring their competitiveness in an increasingly digital world. This signals not just a trend but a fundamental shift in how fintech companies are reimagining their offerings and their role in the global economy, the report says.

Generative AI (genAI) in particular is witnessing booming adoption. The SFA and Accenture’s 2024 Singapore Tech Talent Report reveals that 89% of financial institutions are exploring or have implemented GenAI, with 65% actively using it—a 27% increase from 2023.

Singapore continues to lead fintech funding

In 2024, Singapore continued to lead fintech funding across ASEAN. In the first nine months of the year, Singapore’s fintech companies bagged US$745 million in funding, accounting for 53% of fintech funding amount and 62% of deal count in Southeast Asia.

The amount represents a slight decline from the US$767 million secured during the same period the previous year, showcasing the resilience of the Singaporean fintech industry despite global funding challenges.

Major funding rounds in 2024 include:

• GXS – US$ 280 million (2 Rounds)
• Anext Bank – US$ 148 million
• Partior’s US$60 million Series B;
• SDAX’s US$50 million Series B;
• NIUM’s US$50 million Series E; and
• Sygnum’s US$40 million Series B.

Singapore is home to six of the 17 fintech unicorns in Southeast Asia. These unicorns are Advance Intelligence Group (valued at US$2 billion), Bolttech (US$1.5 billion), Amber Group (US$3 billion), Coda Payments (US$2.5 billion), Matrixport (US$1.05 billion) and NIUM (US$1.4 billion).