Singapore banked a record high of US$229 million in fintech or financial-technology funding last year, fuelled by two major deals in the fourth quarter and government support.
Two of the top 10 deals in Asia were completed in Singapore in the last three months of 2017, where mobile commerce startup GoSwiff was bought in a US$100-million buyout by Paynear Solutions and Smartkarma raised US$13.5 million in its Series B round.
Total fintech funding in Asia overall fell to US$3.85 billion last year, a massive fall from more than US$10 billion invested in 2016, according to KPMG.
The Monetary Authority of Singapore (MAS) reportedly focused on areas like blockchain, artificial intelligence and machine learning.
The positive government intervention might have accounted from the differential from the rest of Asia.
While fintech funding grew in Singapore, the total value of deals in Asia for the fourth quarter dropped to US$748 million across 38 agreements.
KPMG said Singapore was attracting considerable international attention, drawing in established venture capital funds, large corporations and other major fintech investors looking to make the Lion City its Asean hub.
The US continued to dominate global fintech investment, accounting for nearly two-thirds in Q4 2017. Global fintech investment last year was estimated at US$31 billion, unchanged from the previous year.
The MAS said it was hoping to make “financial inclusion” a top priority and hoped to make it easier and more cost-effective for foreigners to remit payments home.
KPMG’s Singapore’s financial services chief Chia Tek Yew said: “In Singapore and across Southeast Asia, financial inclusion is a big focus area, with fintechs focused on everything from micropayments and microlending, to remittances, and even microinsurance.
“Given the fragmented markets, fintechs are not taking a disruptive approach to these services, focusing instead on building partnerships with telcos and other local players in order to better engage with potential customers,” Chia added.
Meanwhile, Singapore is expected to put a tax hike in this year’s government budget announcement.
Nine of 10 economists told Reuters they expected a February 19 rise in the goods and services tax (GST), the first such increase since 2007. The authorities have said revenues need to rise to meet future social spending needs as the population ages.
Finance minister Heng Swee Keat was also expected to tinker with taxes on online giants like Amazon, wealth and sugar when he unveils his plan for the next financial year.
Singapore last year measured its fastest economic growth in three years, estimated at 3.5 per cent.
“Strong economic growth is a good pull factor supporting the tax hike,” said Francis Tan of Singapore’s United Overseas Bank.