ReleaseWire Connect

As of November 2021, Singapore remains the top location in the ASEAN region in terms of the number of deals made by fintech firms. A total of USD$1.6 billion in investments was secured by Fintech firms in Singapore with almost half of the deals attributable to the city state. Indonesia took second place behind Singapore with USD$904 million in funding raised while Vietnam ranked third in the ASEAN region, raising USD$375 million after two mega rounds.

Fintech has had something of a bumper year on a global level - and especially in Singapore. In fact, it has been an incredibly strong year for the Singapore industry with local fintechs raising a record S$3.1b in equity funding. On a global basis, funding for fintechs doubled over the past year but in Singapore this increased by 2.5 times. This kind of progress is not necessarily new for the fintech sector, which continues to accelerate and has now seen a number of record-breaking years, despite some challenging economic conditions.

The financial innovation of the past decade has created some incredible opportunities but also opened up a new, more complex risk landscape. Retail investments in particular have seen a large number of investment products with much more intricate risk-reward profiles. As a result of this shift, the Monetary Authority of Singapore is now taking steps to try and introduce more safeguards for these products. In particular, it has proposed changes to the classification of certain products that will mean those that are labelled as 'complex' will come with a number of new safeguards attached.

Operations technology cyber risk is something that frequently goes unaddressed in many organisations. This is due to the fact that there have been only a few cyber-attacks that have successfully managed to undermine industrial control systems (e.g., Stuxnet in Iran). However, everything changed in 2021, particularly when ransomware hit the Colonial Pipeline in the US, resulting in a very new threat landscape when it comes to operations technology cyber risk.

The government in Singapore has announced a range of new initiatives that are designed to boost the local stock market, help to secure a recovery from the pandemic and bring in "promising high growth companies" from around the area. Although the stock market here has previously been a favourite for REITs there hasn't been much in the way of big-ticket IPOs from the tech sector and the government is keen to start making this happen. So, the government has announced a new fund to help companies raise capital through public listing in Singapore. The first phase of the fund will begin with a $1.5 billion Singapore dollars tranche that will come from the government co-investing with state investment firm Temasek.

The number of cryptocurrency hacks and scams has gone into overdrive over the past year. While overall crypto-related fraud activities have been falling since 2019, recent research suggests that this is not the case in niche areas and the latest target is decentralised finance (DeFi) applications and protocols. It's these crimes (De-Fi related crimes) that continue to surge from one quarter to the next and which are proving particularly lucrative - it's estimated that criminals made around US$471 million from De-Fi related crimes between January and July 2021.

A new partnership has been established between the UK and Singapore with a view to working jointly to reinforce regulatory co-operation and make green finance more of a priority. The Monetary Authority of Singapore and HM Treasury in the UK made a joint statement over the summer indicating that this collaboration was imminent.

Private debt has been a solid part of the investing landscape in the US and Europe for many years. However, it's not so well embedded in Asia Pacific where it's an asset class that is still relatively under-invested in. In recent years that has been starting to shift with around a 15% growth rate in private debt AUM per year since 2014.

The asset management industry currently exists in a challenging environment, one that is experiencing shifts in asset classes, market volatility, a potentially long recession and new swathes of corporate debt. However, there are also many opportunities thanks to the large amount of capital that is available for investment and the markets that are expanding in locations such as China and Asia Pacific.

A partnership between Singapore's central bank and the private sector is being put in place to help develop the asset management industry in the region.