PwC Singapore, Singapore Economic Development Board (EDB) and Singapore FinTech Association (SFA) revealed the growth trends of the?financial technology industry in Singapore

PwC’s 2022 FinTech report?brought to public notice that the Singaporean fintech ecosystem now extends across a wide range of sectors and sub-sectors while leveraging its access to the growth markets of ASEAN and beyond.

The country which is hosting both locally and internationally-headquartered fintech firms is one of the key markets for those companies eyeing ASEAN expansion. In the first 9 months of 2022, fintech investments in the region stood at US$4.3 billion, which is higher than the combined investment amount recorded from 2018 to 2020.

Besides, the fintech firms operating in the country are reaching the “scale-up” phase of growth, with 60% and 35% of respondents in the payments and lending sectors, respectively, reporting more than S$10 million in annual revenues.

The strong position of the local fintech industry is promoted by regulatory support and regional connectivity. Due to favourable economic and tax environments, foreign fintech firms also increasingly choose Singapore for their ASEAN or APAC regional headquarters. Thus, Singapore has already surpassed the threshold of 1,000 fintech firms operating in its jurisdiction.

Segmentwise, payments remain the most significant part of the Singaporean fintech scene. They take up to 31% of the local fintech market. Fintech infrastructure providers and RegTech follow the lead, with 18% and 17% of the market share, respectively.

Lending is responsible for another 15% of the fintech activities in Singapore, while crypto and Web3 technologies take only 5% of the market share.

At the same time, the money management sector with an 8% share of the local industry derives the highest proportion of its revenue from Singapore, likely due to the wealth on offer and strong investor demand.

PWC predicts that fintech users will reach 5.48 billion by 2027, while an average transaction value per neobanking user is expected to be US$18,080 in 2023. At the same time, Southeast Asia is envisioned to become the fourth largest aggregate economy by 2030, behind the EU, US, and China.

In this respect, Southeast Asia with its emerging economies, expanding young tech-savvy population and growing middle class presents a range of fintech opportunities. Besides, SMEs in the region still remain underserved by traditional finance, calling for FinTech innovators to step up.