Propelling Singaporean SMEs to greater heights with fintech

From Rakesh Bhatia at Singapore Business Review:

“According to the January 2017 report by Hootsuite and We Are Social Singapore, there are currently 644.1 million people in Southeast Asia. Of which, 53% are internet users making the region ripe for growth and expansion for Fintech adoption… In Singapore, the launch of the Smart Nation initiative has identified fintech as an emerging industry. The Monetary Authority of Singapore (MAS) is leading by implementing a regulatory sandbox that enables entrepreneurs to innovate further.”

Fintech refers to any new innovations in how people conduct business transactions, with the use of current technology. Since the invention of fiat currency, the recent explosion of Mobile Payments, Blockchain technology, Peer to peer Lending etc, has revolutionised the global Fintech landscape. Processes which were once handled with paper money and human interactions are now being replaced with digital currency and online transactions. With the inexorable advent of Fintech, comes significant changes and the implementation of regulations from the government. In Singapore, the Monetary Authority of Singapore (MAS) implementation of a regulatory sandbox, enables financial institutions and Fintech players to experiment with promising innovations in the market within the regulatory framework as stipulated by MAS. Based on the experiment, MAS will then decide on appropriate measures to change specific legal and regulatory requirements.

In addition, MAS commitment of S$225 million to help financial firms set up innovation labs and fund infrastructure to deliver Fintech services will lower the barriers of entry for startups and SMEs. With SMEs contributing to a large part of the economy, Fintech players provide SMEs the opportunity to secure loans, which they often find difficulties from traditional financial institutions. Where banks find loans under S$100,000 risky and time consuming, peer to peer lending platforms are more flexible with loan amounts. This would often lead to faster approvals and quicker funding for SMEs.

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