Singapore’s Fintech Investments Jumped 300% in Q2
- The total fintech investments surged to $278 million in the second quarter, compared to $68 million in Q1.
The official report states that the fintech sector of the city-state attracted $278 million (S$371 million) during Q2, compared to just $68 million in the first quarter. More than 40% of South-east Asia’s fintech companies are based in Singapore, and its Government has allocated more than $200 million to grow the financial technology ecosystem in the country.
The overall funding in Asia’s fintech sector dropped significantly during the second quarter because of the Coronavirus Coronavirus The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, most countries also resorted to lockdowns in a bid to stifle the virus’ spread. At the time of writing, nobody knows whether this tactic will succeed in controlling Covid-19, though its early impact on financial markets is being felt already.Equity markets across most exchanges effectively crumbled by nearly a third in early 2020, with the worst being seen in March 2020. Stock markets have since rebounded, though only with the help of broad-based stimulus programs. Nowhere was this more prevalent than in the United States, with the Federal Reserve resorting to measures not used since the Great Financial Crisis. This included trillions in bond-buying purchases in a bid to stabilize the economy.The outbreak of Covid-19 also saw the collapse of the global oil market, which saw futures briefly enter into negative territory. Highly reduced demand out of China and most economies, as well as a price war between Russia and Saudi Arabia have exacerbated this trend.Effects of Covid-19 on BrokersIn the retail space, forex brokers have experienced an early surge in trading volumes in 2020. This can be explained by a large uptick in potential clients, ironically due to stay at home orders and quarantining.It remains to be seen whether this trend will hold longer term as middle-aged potential investors return to work in 2020. In terms of other operations, brokers have had to rethink traditional call centers and other mechanisms for reaching clients due to the disruption of the virus.A push for online call centers and other such support is likely to overtake other methods of dealing with clients with a vaccine as of yet not available. Longer-term, a looming recession can also potentially impact brokers with the pool of investors once again possibly shrinking. As the situation of Covid-19 is unprecedented, brokers have joined other entities in a wait-and-see mode. The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, most countries also resorted to lockdowns in a bid to stifle the virus’ spread. At the time of writing, nobody knows whether this tactic will succeed in controlling Covid-19, though its early impact on financial markets is being felt already.Equity markets across most exchanges effectively crumbled by nearly a third in early 2020, with the worst being seen in March 2020. Stock markets have since rebounded, though only with the help of broad-based stimulus programs. Nowhere was this more prevalent than in the United States, with the Federal Reserve resorting to measures not used since the Great Financial Crisis. This included trillions in bond-buying purchases in a bid to stabilize the economy.The outbreak of Covid-19 also saw the collapse of the global oil market, which saw futures briefly enter into negative territory. Highly reduced demand out of China and most economies, as well as a price war between Russia and Saudi Arabia have exacerbated this trend.Effects of Covid-19 on BrokersIn the retail space, forex brokers have experienced an early surge in trading volumes in 2020. This can be explained by a large uptick in potential clients, ironically due to stay at home orders and quarantining.It remains to be seen whether this trend will hold longer term as middle-aged potential investors return to work in 2020. In terms of other operations, brokers have had to rethink traditional call centers and other mechanisms for reaching clients due to the disruption of the virus.A push for online call centers and other such support is likely to overtake other methods of dealing with clients with a vaccine as of yet not available. Longer-term, a looming recession can also potentially impact brokers with the pool of investors once again possibly shrinking. As the situation of Covid-19 is unprecedented, brokers have joined other entities in a wait-and-see mode. Read this Term pandemic. The investments dropped to $2.4 billion in Q2, compared to $3.13 billion in Q1 as China and India reported a substantial dip in funding.
“Interestingly, in 2020, Singapore has demonstrated resilience amidst the COVID-19 pandemic. While the COVID-19 pandemic has resulted in a fall in overall FinTech funding in Asia (particularly in China and India), the funding landscape in Singapore has been less volatile. Despite an initial decline in funding, Singapore’s FinTech investments rebounded in the second quarter of 2020, with investors recognising the opportunities existing in Southeast Asia. This support for FinTechs in Singapore stands in contrast to other markets in the region, where many FinTechs, especially early-stage businesses, have struggled to cope with the impacts of the pandemic,” the report states.
Fintech Hub
Singapore showed outstanding growth in the fintech sector in the last 5 years. The total number of fintech companies jumped to 1,000 in 2020, compared to just 100 in 2015. The country now has nearly 10,000 employees related to the fintech sector, compared to around 1,100 in 2015.
“Singapore is increasingly becoming a hub that includes data centres, regional talent, and diversified sources of capital. We have seen meaningful acceleration on this, and despite the COVID-19 pandemic, global investors have been injecting funds into Singapore FinTechs, an indication of the strength of our ecosystem,” Pradyumna Agrawal, Director of Investment at Temasek, said in a statement.
The official report states that the fintech sector of the city-state attracted $278 million (S$371 million) during Q2, compared to just $68 million in the first quarter. More than 40% of South-east Asia’s fintech companies are based in Singapore, and its Government has allocated more than $200 million to grow the financial technology ecosystem in the country.
The overall funding in Asia’s fintech sector dropped significantly during the second quarter because of the Coronavirus Coronavirus The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, most countries also resorted to lockdowns in a bid to stifle the virus’ spread. At the time of writing, nobody knows whether this tactic will succeed in controlling Covid-19, though its early impact on financial markets is being felt already.Equity markets across most exchanges effectively crumbled by nearly a third in early 2020, with the worst being seen in March 2020. Stock markets have since rebounded, though only with the help of broad-based stimulus programs. Nowhere was this more prevalent than in the United States, with the Federal Reserve resorting to measures not used since the Great Financial Crisis. This included trillions in bond-buying purchases in a bid to stabilize the economy.The outbreak of Covid-19 also saw the collapse of the global oil market, which saw futures briefly enter into negative territory. Highly reduced demand out of China and most economies, as well as a price war between Russia and Saudi Arabia have exacerbated this trend.Effects of Covid-19 on BrokersIn the retail space, forex brokers have experienced an early surge in trading volumes in 2020. This can be explained by a large uptick in potential clients, ironically due to stay at home orders and quarantining.It remains to be seen whether this trend will hold longer term as middle-aged potential investors return to work in 2020. In terms of other operations, brokers have had to rethink traditional call centers and other mechanisms for reaching clients due to the disruption of the virus.A push for online call centers and other such support is likely to overtake other methods of dealing with clients with a vaccine as of yet not available. Longer-term, a looming recession can also potentially impact brokers with the pool of investors once again possibly shrinking. As the situation of Covid-19 is unprecedented, brokers have joined other entities in a wait-and-see mode. The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, most countries also resorted to lockdowns in a bid to stifle the virus’ spread. At the time of writing, nobody knows whether this tactic will succeed in controlling Covid-19, though its early impact on financial markets is being felt already.Equity markets across most exchanges effectively crumbled by nearly a third in early 2020, with the worst being seen in March 2020. Stock markets have since rebounded, though only with the help of broad-based stimulus programs. Nowhere was this more prevalent than in the United States, with the Federal Reserve resorting to measures not used since the Great Financial Crisis. This included trillions in bond-buying purchases in a bid to stabilize the economy.The outbreak of Covid-19 also saw the collapse of the global oil market, which saw futures briefly enter into negative territory. Highly reduced demand out of China and most economies, as well as a price war between Russia and Saudi Arabia have exacerbated this trend.Effects of Covid-19 on BrokersIn the retail space, forex brokers have experienced an early surge in trading volumes in 2020. This can be explained by a large uptick in potential clients, ironically due to stay at home orders and quarantining.It remains to be seen whether this trend will hold longer term as middle-aged potential investors return to work in 2020. In terms of other operations, brokers have had to rethink traditional call centers and other mechanisms for reaching clients due to the disruption of the virus.A push for online call centers and other such support is likely to overtake other methods of dealing with clients with a vaccine as of yet not available. Longer-term, a looming recession can also potentially impact brokers with the pool of investors once again possibly shrinking. As the situation of Covid-19 is unprecedented, brokers have joined other entities in a wait-and-see mode. Read this Term pandemic. The investments dropped to $2.4 billion in Q2, compared to $3.13 billion in Q1 as China and India reported a substantial dip in funding.
“Interestingly, in 2020, Singapore has demonstrated resilience amidst the COVID-19 pandemic. While the COVID-19 pandemic has resulted in a fall in overall FinTech funding in Asia (particularly in China and India), the funding landscape in Singapore has been less volatile. Despite an initial decline in funding, Singapore’s FinTech investments rebounded in the second quarter of 2020, with investors recognising the opportunities existing in Southeast Asia. This support for FinTechs in Singapore stands in contrast to other markets in the region, where many FinTechs, especially early-stage businesses, have struggled to cope with the impacts of the pandemic,” the report states.
Fintech Hub
Singapore showed outstanding growth in the fintech sector in the last 5 years. The total number of fintech companies jumped to 1,000 in 2020, compared to just 100 in 2015. The country now has nearly 10,000 employees related to the fintech sector, compared to around 1,100 in 2015.
“Singapore is increasingly becoming a hub that includes data centres, regional talent, and diversified sources of capital. We have seen meaningful acceleration on this, and despite the COVID-19 pandemic, global investors have been injecting funds into Singapore FinTechs, an indication of the strength of our ecosystem,” Pradyumna Agrawal, Director of Investment at Temasek, said in a statement.