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Connecting Two Dynamic FinTech Hubs: The Singapore – Australia FinTech Bridge

It’s been ten months since the Australian Treasury and the Monetary Authority of Singapore signed the Australia – Singapore FinTech Bridge Agreement. We took a closer look at the relationship between the two dynamic FinTech Hubs dominating the region and at how Australian FinTechs can use the bridge to their advantage in their growth plans.

Singapore and Australia: the two leading hubs for financial technology innovation in the region

Both the Lion City and the Land Down Under are known for their robust startup ecosystem. In Asia Pacific, Singapore is ranked number one and Australia number two in the FinTech Nations ranking with 28% of all FinTechs in the region in Singapore, and 16% in Australia.

In both countries, there is a demand for disruptive financial solutions and they both have tech-savvy populations open to adopting new financial technologies. In Singapore, wealth management, payments, and transfers are the dominating FinTech segments, while lending and payments segments reign in Australia. The Singaporean government’s support and incentives have directly resulted in the sector’s growth, while Australia’s historical expertise in banking and lending gives it an upper hand.

A supportive regulatory environment is another thing both countries have in common. Both countries have set up regulatory sandboxes, a controlled framework that allows FinTechs to test their products without incurring the full regulatory burden of operating in the market. The sandboxes mean businesses can work with industry regulators to develop a structure to drive innovation in a safe financial system. With these characteristics, it’s no surprise that both countries are well-positioned to become global leaders in the FinTech Industry.

The bilateral initiative was signed by the Monetary Authority of Singapore (MAS), the central bank and financial regulatory authority in the country-state, and the Australian Treasury. This agreement is the latest step taken under the Australia-Singapore Digital Economy Agreement signed in 2020, a treaty that intends to strengthen collaboration and streamline fintech trade and investment, encourage expertise sharing, and reduce barriers to entry between both FinTech Hubs. In a nutshell, the bridge will provide a seamless process for companies to expand into new markets.

Why Australian companies should be taking advantage of the bridge.

1. Tapping into Singapore’s vibrant FinTech ecosystem and network: The FinTech Bridge will allow Aussie businesses to have a direct connection to the booming fintech ecosystem in Singapore where equity funding has continued to grow: Singapore is now home to about 1400 FinTechs and 40 innovation labs. Access to Singapore’s financial technology industry means also tapping into a network of key players in Singapore and the Southeast Asian market. Building relationships in Singapore will facilitate partnerships and collaborations, in addition to exposure to new ideas and best practices that can help Australian startups stay ahead of the curve.
Furthermore, Singapore has a vast talent pool and consistently attracts foreign talent. With Australia’s current talent shortage, setting up shop in Singapore will also allow businesses to tap into a different and vibrant talent market.

2. Testing out a new customer base and a gateway to the Southeast Asian market: Australian businesses often look to the U.S. and the U.K. when branching out overseas, however, the current economic climate may mean an increase in barriers to entry into those markets, in addition to an intense level of competition. Instead, Australian companies should set their sights on Singapore to establish a base and then expand to Southeast Asia. Singapore, with an educated and tech-savvy population, is an excellent market to test out a growing customer base. The county’s strategic geographic location, incredible infrastructure, and close ties with other Southeast Asian nations also make it an ideal launchpad to expand into the region. The Southeast Asian market is historically underserviced in banking and demands flexibility and innovation in digital financial services.

3. It is cost-effective and will give investors confidence: A supportive regulatory environment minimizing compliance risks and costs, and a collaborative network means a reduction in the time and resources it would normally take Australian businesses to establish a strong presence in the region. The bridge’s streamlined processes and cost-effectiveness will give investors confidence that Australian organizations can be successful in other markets.

International expansion plans are very time-consuming and complex, particularly because we find ourselves in the middle of an economic downturn. Now more than ever Aussie FinTechs should be taking advantage of the Singapore – Australian FinTech Bridge. Whether you are looking to expand into Singapore or other parts of Southeast Asia, having the right talent in place to help you grow and get your organization to profitability is key.

How Storm2 can help you achieve your expansion goals

Storm2 is a global award-winning FinTech recruitment agency, with expertise in the Singapore, Australia, and Southeast Asian markets. If you are unfamiliar with the local hiring and work culture, we will help you navigate these challenges. With our vast network and deep understanding of the local job market, we will help you build the right team for your business. We are passionate about supporting the Australian and Singaporean FinTech spaces and by partnering with us, you can ensure that you are taking full advantage of what the Singapore – Australian Bridge has to offer.

Get in touch to learn how we can support you and follow us on LinkedIn for regular updates on all things FinTech.