FinTech stands for ‘financial technology.’ It can be defined as technology or computer programs that support or enable financial and banking services. In simple words, it is a new idea to deliver the business products or services. E.g., PayPal first used the fintech to transfer money via technology. It reduced not only the time but also the cost of international money transfer by using technology.
Though FinTech has emerged with time across many different businesses providing financial services such as payments, investment management, lending, dealing business with mobile technology, analytics, and big data. It’s a great and easy initiative for the customers.
Some examples of FinTech:
Bitcoin and Ether are examples of cryptocurrencies.
For future decision-making prediction, understanding users’ behavioral patterns, and tracking user data analysis through artificial intelligence.
The technology enhances insurance industry efficiency, and this is known as insurtech.
Payment method becomes much easier, e.g., android pay.
Platforms offer investment’s advice that is based on financial algorithms known as Robo-advisers.
FinTech in Singapore
One of the most thriving sectors in Singapore is FinTech. It has gathered strong support and overgrowing. The central bank of Singapore “MAS” (Monetary Authority of Singapore) has announced great incentives for FinTech companies. These incentives include investments of up to S$225 mil (US$158 mil) by the end of 2020, and also, they are developing the FinTech Innovation Lab. FinTech companies can use these labs for experimentation, collaboration purposes, and office space. The most important thing is that banks or financial service providers welcome with open arms wherever they see a FinTech because they know they will help to increase the accountability and efficiency of financial services.
In May 2016, FinTech office was established by the Singaporean government. They aim to help the local and foreign FinTech companies to make their setup in Singapore. The FinTech Office is an essential entity that consists of many different government organizations: Economic Development Board, InfoComm Media Development Authority, the Monetary Authority of Singapore (MAS) and Enterprise Singapore. This office acts as a non-stop office, and it advises the FinTech companies related to government schemes and grants. They also assist the FinTech companies to stay in compliance with government regulatory requirements.
Regulation of FinTech in Singapore
FinTech industry regulation based on business operations and model. It is much simpler for you to identify the rules and manage what applies to your business according to the business operations and model.
Potentially relevant laws in Singapore:
The Finance companies act applicable to business that accepts the saving and fixed deposits or credit facility.
The Banking Act applicable to business will provide you financial services online, e.g., accepting money transaction.
The Financial adviser’s act is applicable to business which offers information on arranges life insurance products, markets collective investment schemes, and information on investment products.
Insurance Act is applicable to business that benefits insurtech.
Remittance Businesses and Money Changing Act is applicable to business that handles outbound payments and trades foreign currency.
Moneylenders Act is applicable to moneylending business or organizations.
Payment Systems Act is applicable to business offers prepaid wallet services or stored value.
Personal Data Protection Act is applicable to industries or companies that use, collect disclose the personal data of individuals.
Securities and Futures Act is applicable to business which trades certain instruments or manages funds of a certain amount or deals in securities.
Anti-money laundering and terrorism financing quality by the MAS.
Company Incorporation of a FinTech Business
Unlike the unsettling business registration process of traditional banking organization, the FinTech business registration is simple and easy through ACRA BizFile Singapore. First, you have to register your business with the “ACRA” (Accounting and Corporate Regulatory Authority), and the process can be done online through the BizFile+ website.