17/07/2023 (Singapore) - Singapore has emerged as the top destination for fintech investments in Southeast Asia as the Association of Southeast Asian Nations (ASEAN) reports a significant surge in investments in the sector. According to a joint report by PwC Singapore, the Singapore Fintech Association (SFA), and the Economic Development Board (EDB), the fintech investments in ASEAN reached a record-breaking USD4.3 billion in the first nine months of 2022, surpassing the total investments made between 2018 and 2020.
Singapore's position as a fintech powerhouse can be attributed to its robust financial infrastructure and its strategic advantage as a gateway to neighboring countries. The report highlights Singapore's diverse and multilingual talent pool, along with its extensive funding sources for companies operating in the fintech space.
In a separate report published by PwC Singapore, the Singapore Fintech Association, and United Overseas Bank, Singapore and Indonesia collectively attracted approximately 65% of the total fintech investments in ASEAN during 2022.
Despite a challenging macroeconomic environment, the ASEAN region showcased resilience and recorded increased investments in fintech companies. Global fintech investments experienced a decline from USD139 billion in 2021 to USD75 billion in 2022. However, the sector is projected to grow at a compound annual rate of 16% between 2023 and 2028, with a valuation exceeding USD400 billion.
Digital payments emerged as the frontrunner among fintech segments, with predictions that transactions in this sector will reach approximately USD9 trillion by 2023. Moreover, the number of users utilizing digital payment systems is expected to surpass 5 billion in the coming year.
The Monetary Authority of Singapore (MAS), Singapore's market regulator, recently implemented new measures for Digital Payment Token (DPT) service providers. These measures mandate the secure storage of customers' funds in a statutory trust and the separation of customers' funds from the service providers' own funds.