General Info, Demographics, & Basic Fintech Info:

Singapore:

Singapore is a small island nation, so small that it’s in fact one of the few city-states in the world. Yet, it’s a global financial center. Singapore consists of 63 islands, including the main island and several smaller islands (some of which are man made). Singapore’s current population is estimated at around 5,802,264 as of 2018. 96.4% of Singapore’s population that’s over 15 years old is banked (based on data from 2014). There are about 3.62 million social media users in the country (2018), and 4.47 million people accessing the internet as of 2017. According to this infographic, Singaporeans own an average of 3.3 devices per person, with mobiles being the most popular at 85%, and mobiles have 34% of the internet usage. 26% of internet users use the internet for direct purchases, while 42% use it to compare choices before making an offline purchase. 3 out of 4 Singaporeans who shop online prefer to do so on a computer.

Singapore ranked 4th place according to their GDP among the ASEAN countries, underneath Indonesia, Thailand, and Malaysia, according to 2018 estimates. Fintech is booming in Singapore, with the government, banks, and even their patent office looking to spur fintech growth. The central bank of Singapore, MAS, has even set up a regulatory sandbox for fintech companies to test their products in a safe manner. It’s estimated that the country had a record high of $229.1 million in fintech funding last year. Singapore has even dedicated a yearly festival to fintech: The Singapore Fintech Festival. Furthermore, the city-state has made a number of fintech-related international partnerships and deals. For example, a deal has been struck between the Singapore Fintech Association (SFA) and the Fintech Association of Japan (FAJ), which aims to help fintech cooperation between the two countries. The deal will increase the Japanese fintech industry, and promote Singapore as a Japanese business destination in the Asian region. The Fintech sector has also added a number of new jobs, with 2,000 being accredited to the industry out of a net 7,800 new jobs created between 2016-2017.

In a report by Fintech Singapore, last updated on the 15th of November in 2017, there was at that time 210 Fintech companies in the country. Those companies break down as follows: Payments: 32, Investment/Wealth Management: 41, Blockchain/Cryptocurrency: 23, Insurtech: 20, Lending: 16, Remittance: 12, Regtech: 12, Comparison Sites: 11, Crowdfunding: 9, Data Management: 9, Digital Banking: 6, Personal Finance: 6, Chatbot: 6, Currency Exchange: 4, and API: 3. It looks like the country will continue to grow strong in the Fintech industry well into the future.

Indonesia:

Indonesia is another island nation, but much much bigger, covering 1,904,569 square kilometers. At least as of June 2017, the Indonesian government didn’t know exactly how many islands it had, with a rough estimate of 17,500. Other institutions have put the count at 13,466; 17,508; and 18,307. The country has an estimated population of around 261,100,000 people as of 2016 (the majority of whom are under 35), with an estimated 9,608,000 million people (as of 2010) living in the capital, Jakarta. In a report from 2018 (mentioned below) it has a banked population of around 48.9% and active social media users of about 130 million, with around 143,200,000 million accessing the internet. Of those gaining internet access, 30% come from desktops, while 70% come from mobiles (of which, 72.4% are urban, 49.4% are semi-urban, and 48.2% are rural).

Indonesia has the largest economy in Southeast Asia, and it’s slowly but surely growing in the Fintech industry. The country has growing mobile phone usage and internet penetration rates. In a recent report published by Fintech news on June 26th, 2018 (from where we have gathered much of this information), they show that in 2016 they found 50 fintech companies operating in Indonesia, compared to 167 fintech companies they discovered for their 2018 report. Disclosed Fintech investments from 2017 had a total value of USD $176.75 million. The Fintech market has a projected transaction value for 2018 of USD $22,338 million. And the expected growth rate of transaction value is 16.3% per annum. The distribution of the Indonesia Fintech Ecosystem (based on a 2018 report) is as follows: Payments: 38%, Lending: 31%, Personal Finance & Wealth Management: 8%, Comparison: 7%, Insurtech: 6%, Crowdfunding: 4%, POS System: 3%, Cryptocurrency And Blockchain: 2%, and Accounting: 1%.

Fintech & Cryptocurrency – Regulations & Legalities:

Singapore:

Singapore didn’t appear to want to regulate cryptocurrencies up until comments were made back in March by the central bank, who said that they were ‘assessing’ the need to regulate cryptocurrencies. We’d expect any such regulations to be light and basic, hopefully. At least by that time, MAS did require exchanges to comply with AML/CFC protocols. In the meantime, Singapore will be keeping an eye out for suspicious and fraudulent crypto-related activities.

As to Fintech, as we’ve discussed already the government, banks, and even their patent office are trying to spur fintech growth in the country. The IPOS (Intellectual Property Office of Singapore) has launched the Fintech Fast Track initiative, which can expedite the patent application-to-grant process for fintech inventions. And we’ve already mentioned Singapore’s central bank, MAS, setting up a regulatory sandbox for fintech companies to safely test their products.

Indonesia:

Not very long ago, Indonesia’s central bank had warned all parties about buying, selling, or  trading cryptocurrency. However, according to this article from Bitcoin.com written on June 4th, 2018, Indonesia had decided to regulate cryptocurrencies as commodities. Another article written on June 8th, 2018 by Cryptovest echoed the same sentiment. In this article by Finance Magnates, written on June 6th, 2018,  the government had approved cryptocurrency futures trading, and was preparing regulations which would govern exchanges, wallets, and mining operations. The article also showed that trading would be taxed.

As to Fintech in Indonesia, regulation comes primarily from two main bodies: Otoritas Jasa Keuangan (OJK), and Bank Indonesia. Bank Indonesia has taken upon itself the regulatory scope of payments. OJK is a supervisory arm of the Indonesian government which helps regulate the financial services sector. Within the Fintech ecosystem, OJK regulates crowdfunding, P2P lending, insurtech, digital banking, online financing, fintech in capital markets, consumer protection, and data security. These regulators are helping to prop up the fintech sector through a multiple of means, such as launching the National Payment Gateway, creating the Fintech Regulatory Sandbox & the Fintech Office, and setting up regulations for P2P lending services (which, as of April 2018, there were 40 Peer-to-Peer lending services registered with the OJK).

Fintech Implementation & Examples:

Singapore:
You can see a list from last year of Fintech companies that were operating in Singapore at that time, HERE.

A German fintech firm called Ayondo recently launched and became the first fintech company to be listed on the Singapore Stock Exchange’s Catalist Board. The company is about 10 years old this year, and specializes in trading and investment solutions for institutional and retail customers, they’re essentially a social trading company. However, this company isn’t native to Singapore, it’s based in Frankfurt, Germany, and has offices in the UK, Switzerland, and Spain.
In an article from April, 2018, by Fintech Singapore, they give a list of the latest Fintech funding deals at that time, which included: the AI startup Kristal.ai, that helps clients to digitally manage their assets, and which raised $1.87 Million USD; the blockchain startup Zenprivex, that is building an exchange and has a number of token products, and which raised $1.3 million USD; the payments startup CardUp, that is a recurring payment platform, and which raised $1.7 million USD; the Asia Focus Group, that is creating a multi-cryptocurrency and group monetization chat application Consentium (which can pay you for setting up groups), and which raised $20 million USD; and the Robo-advisor StashAway, that is an investment service (the first of its kind to get licensed by MAS last year), and which raised $5.3 million USD.

Indonesia:

You can see a list from this year of Fintech companies that were operating in Indonesia around June, HERE, and you can see descriptions of many of those companies HERE.

PayPal Holdings Inc. has teamed up with Indonesian venture-capital firm Alpha JWC Ventures (based in Jakarta) to provide help to new financial technologies being developed in Southeast Asia. The latter will provide as much as $5 million for the PayPal Incubator, which in turn coaches and mentors selected startups. The company was first launched in 2016 in Singapore, interestingly, and it hopes to expand this help to other countries as well.

Other interesting news on Fintech in Indonesia, can be found in this article from Statista (an outlook on the Fintech market in Indonesia), and this article from Bloomberg (Indonesia planning to tighten financial technology regulations – from May, 2018).

Conclusion:

Both Singapore and Indonesia are looking to be growing in and accepting of fintech technology, and we look forward to seeing further news from these two countries. Singapore seems to be more advanced and open in the Fintech field as a whole, and being a tiny country, its efforts are tightly knit and unified, whereas Indonesia has a far larger population, and thus a larger potential market, and Fintech startups appear to be growing fast in the country. Both countries seem appealing to look into as a base for financial technology startups.

This article was created through cooperation with Cyberius, a digital marketing company.