In the midst of these developments, Singapore serves as an “excellent bridge” for companies to reach its neighbours in Southeast Asia, the report noted.
The Republic has a conducive business environment supported by a sound technological and financial infrastructure, which balances the risks involved with investing in emerging countries.
In 2022, a separate report by PwC Singapore, SFA and UOB found that Singapore and Indonesia accounted for more than three-quarters of ASEAN’s total funding in fintech that year. Singapore had the highest number of fintech firms within the ASEAN-6 (Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam) – 1,580 as at November 2022.
On the global front, the current report said that challenges remain for the industry, especially at a time when macroeconomic headwinds and geopolitical tensions have dampened operations and led to mass layoffs.
Investments in the global fintech industry fell to US$75.2 billion in 2022 from US$139.8 billion the previous year. However, the industry achieved a market value of over US$194.1 billion in 2022, and is projected to grow at a compound annual rate of 16.8 per cent between 2023 and 2028, when it could reach US$492.81 billion.
Payments continue to retain the pole position as the top performing fintech vertical, with the digital payments segment globally estimated to reach a total transaction value of US$9.47 trillion in 2023. The number of users is expected to reach 5.48 billion by 2024.
Meanwhile, the neobanking sector, which refers to digital-only platforms, is projected to have a revenue increase of 28.9 per cent worldwide. The average transaction value per user in 2023 is anticipated to reach US$18,000.
It is also estimated that 114 countries, accounting for over 95 per cent of global gross domestic product, have either launched or are considering launching central bank digital currencies (CBDCs) for both retail and wholesale purposes. This is up from 35 countries in 2020.
The Monetary Authority of Singapore launched Project Ubin+ last November to explore cross-border foreign exchange settlement using wholesale CBDCs.
According to the PwC-SFA-EDB report, there are three trends that will continue to shape the global fintech industry – artificial intelligence (AI), sustainability and digital trust.
Singapore has introduced a number of initiatives to support companies in these areas.
For example, AI Singapore, a national research and innovation programme, introduced the AI International Grant Call to offer grants for AI research through partnerships between Singapore and other countries.
The AI Verify Foundation, launched in June by the Infocomm Media Development Authority, is the world’s first AI governance testing framework and toolkit, which allows industry players to demonstrate their deployment of responsible AI.
