Millions have been invested in fintech by regulators in Singapore and the UK government is supporting the industry, but how different is financial technology in both nations? bobsguide spoke to Steve Leonard, executive deputy chairman at the Infocomm Development Authority (IDA) about the relationship between UK and Singapore startups, what we can expect in the future of fintech and what a Smart Nation truly is.
Earlier this year, a report produced by think tank Z/Yen revealed that London had replaced New York as the world’s leading financial centre, after the Conservative win in the general election and lack of uncertainty regarding taxation. Alongside this, the Innovate Finance 2020 Fintech Manifesto received support from David Cameron, UK Prime Minister, and the city of London established itself as a leading fintech hub.
Alongside this, 40% of the £75 million that was invested into businesses operating in London during the first half of 2015 was directly invested into local fintech. Z/Yen also ranked Singapore as the fourth financial centre of the world but it could soon overtake New York and Hong Kong, as the nation is thought of the fintech leader in the Asia Pacific region.
Singapore is supported by the IDA, the arm of the Singapore government that is responsible for technology and is behind the country becoming the world’s first Smart Nation.
Leonard defines the IDA as the chief information officer of the Singapore government, who designs, builds and manages the technology infrastructure: “the cheerleaders of the tech industry”. On the other hand, according to a recent British market research survey compiled by the IDA and YouGov in partnership, big obstacles inhibit UK startups from progressing.
“Finding or growing a sustainable customer base is interestingly identified as the biggest challenge facing UK-based tech startups today, during the period of late October to early November this year,” the survey found. IDA consulted 193 UK-based early stage tech startups to find out what challenges they are facing and what they have to assess when expanding their business overseas.
The survey revealed that over 50% of startups that were questioned are focused on international growth, and the rest have either already expanded abroad or are planning to do so. “With technology and connectivity today enabling aspiring entrepreneurs to expand their startup business globally relatively quickly, the UK is becoming home to innovation-driven tech startups with aspirations to go global,” the report read.
Leonard highlighted how Singapore is a small place in relation to the UK and said that one of the challenges that the country faces is trying to figure out how to use the resources they have to their advantage. However, if Singapore and the UK worked together, it could be mutually beneficial, Leonard explains.
“Singapore is a big financial centre in Asia, so what we can do is partner with London and work with organisations, like Startupbootcamp. A number of banks that have big operations in the UK, have big operations in Singapore and we can share and leverage the ideas surrounding topics like cryptocurrency and authentication of identity,” Leonard says.
As in most countries, cryptocurrency still remains a debated topic in the UK and Singapore: nothing has been established as concrete on this subject. Leonard discussed how members of the FCA have had meetings with the Monetary Authority of Singapore (MAS), Singapore’s central bank, who have in turn, hosted meetings with large firms in order to outline the best way that this technology can be used.
$225 million has been recently invested into fintech by the MAS and Leonard explains that Singapore is a country in which they value innovation. “Regulators in Singapore have earmarked this investment for exploring innovation and new technology. We know innovation is important and the idea of a non-physical currency is becoming increasingly important, but the problem is that a lot of unintended outcomes still happen, like the hackers demanding Greek banks for a ransom.”
2015 has seen a biometric boom, but both countries are still in the experimentation phase of using this technology to authenticate payments. Replacing cash with biometric tech could be a possibility in Singapore as a lot of visitors are from other countries and it would make payments in other currencies simpler, which is something that could apply to the UK too. “The nice thing in London is that you can leave the house with cash for an emergency and use a card all day,” Leonard explains.
However, an important note that Leonard makes is that the world should use technology for the greater good and not just forming startups and creating applications for no reason: this is what a Smart Nation really is.
“Smart Nation is a mindset, not something that can be scored. We have some really difficult problems facing the world in the years ahead like the provision of food, water and healthcare. For us, Smart Nation is our way of saying that startups, governments, corporates and universities should work together, to build something more worthwhile, such as an app that provides healthcare for a whole community, for example.”
Leonard continues to say that every new form of tech should be created with the human perspective in mind and should remove friction. “Think about how we could resolve the underbanked factor in the remote regions in South East Asia, it could be a life changer for a farmer in a village.”