Agreement With Singapore Opens New Fintech Market For UK Businesses
25th November 2022
The UK and Singapore have agreed a new MoU boosting fintech trade and cooperation at their 7th Financial Dialogue in Singapore today (25 November 2022).
The UK and Singapore agree a Memorandum of Understanding (MoU) on the UK-Singapore FinTech Bridge to remove barriers to fintech trade and boost cooperation.
This will deepen engagement between businesses, and regulators, adding to previous co-operation.
Policy makers from both the UK and Singapore will meet regularly with the fintech sector to work to remove regulatory barriers to trade
The Fintech Bridge builds on an agreement signed in 2016 - which will remove barriers to fintech trade by opening new regular talks between regulators and businesses, in addition to previous areas of cooperation
This will increase the cooperation and sharing of information on emerging trends in the fintech sector. It will also break down barriers to trade for UK and Singaporean fintechs, boosting growth and investment opportunities.
Andrew Griffith MP, Economic Secretary to the Treasury said: said:
The UK and Singapore are among the world's leading jurisdictions for fintech investment - and today's announcement will only accelerate growth and innovation in our respective sectors.
The MoU we've announced today is crucial - and I would like to thank the Monetary Authority of Singapore for their constructive engagement throughout discussions.
CEO of Innovate Finance, Janine Hirt said:
Innovate Finance welcomes this announcement. A MoU between UK and Singapore will deliver a strengthened framework for vital regulatory and policy discussions between the two countries, enable innovation across financial services, and ensure businesses based in both the UK and Singapore have the ongoing support for their ambitions for growth to be realised.
We look forward to supporting future financial dialogues and business to business activity between these markets. We are also delighted to be working with the key organisations engaged to promote the opportunities this FinTech bridge has to offer, and to welcoming FinTech businesses to IFGS and UK FinTech Week next year.
Miles Celic, Chief Executive Officer, TheCityUK, said:
The UK and Singapore are two of the world's most dynamic and innovative FinTech markets. The FinTech Bridge will drive exciting new opportunities and greater alignment of regulatory approaches will help with the expansion of FinTechs from the UK and Singapore into each other's markets. Greater cooperation between government, regulators and industry will boost innovation and drive better outcomes for customers.
This MoU will also further deepen the engagement and opportunities between two of the premier international financial and related professional services centres.
The existing Regulatory Cooperation Agreement signed in 2016 has enabled the UK and Singaporean fintech sectors to closely align at a regulatory level. Today's commitment goes further in a number of areas, making clear the business support available to firms, highlight opportunities in each other's markets and creating a clear link between challenges firms face and policy discussions.
The MoU will come into effect next week once formalities have been completed on both sides.
In the first half of 2022 total capital invested in FinTech globally reached $59 billion - flat year-on-year. However, the UK FinTech sector continues to grow with investment reaching $9.1bn - a 24% year-on-year increase from H1 2021, and more than the rest of Europe combined.
Across the same period, Singapore was ranked as South East Asia’s leading jurisdiction for fintech investment, and the sixth globally.
In Europe, $17.6 billion was invested into European FinTech across 708 deals, a 10% increase compared to the same period of 2021.
However, such an increase has been driven by the positive growth in investment in UK FinTech. Excluding the UK, the rest of Europe was in fact down by 2% compared to the same period in 2021.
More
At the Financial Dialogue, the UK and Singapore agreed on a Memorandum of Understanding on the UK-Singapore FinTech Bridge[1]. The FinTech Bridge seeks to support continued growth, investment, and technological innovation in this sector, building on active interest of FinTech players in the areas of payments, RegTech and wealth management. Both countries strongly welcomed this deepened co-operation on FinTech and the opportunities the industry can deliver in relation to financial inclusion, enhanced innovation, and improved outcomes for consumers.
Both countries recognised the importance of the UK-Singapore Digital Economy Agreement (DEA) signed earlier this year, and the principle of the free flow of data which is enshrined in it. They noted the significance of this agreement in underpinning the development of respective FinTech sectors and supporting future digital and innovation partnerships.
The UK and Singapore discussed their joint interests in sustainable finance as well as FinTech and innovation.
Sustainable Finance: Both countries noted continued momentum at COP27 to focus on implementation, including the need to mobilise capital to developing economies to finance the transition to net zero, using innovative approaches such as blended finance and carbon markets.
Transition finance -
The UK and Singapore recognised the importance of transition plans and pathways to achieve the Paris Agreement’s goal of limiting global temperature increase to 1.5°C from pre-industrial levels. Both agreed to work together on transition finance. As a first step, the two countries agreed to explore collaboration opportunities, working with partners such as the UK Transition Plan Taskforce and the Glasgow Financial Alliance for Net Zero’s (GFANZ) Asia Pacific office, which is based in Singapore, to drive international consistency in design and disclosure of transition plans.
Disclosure standards -
The UK and Singapore affirmed their strong commitment to the implementation of International Sustainability Standards Board (ISSB) disclosure standards. Both countries will continue to work with the International Organization of Securities Commissions (IOSCO), the ISSB and other international organisations to implement a comprehensive global baseline of sustainability-related disclosure standards that is interoperable with jurisdiction-specific requirements. Both countries also commit to phase in mandatory climate-related financial disclosures that provide consistent, comparable and decision-useful information for market participants and financial authorities.
Greenwashing -
The UK and Singapore discussed efforts to combat greenwashing, including in relation to sustainability disclosures and sustainable investment product labels. It was agreed that regulators should continue discussing how to adopt a global, coherent, and co-ordinated approach on regulatory oversight of ESG ratings and data products providers, grounded in IOSCO’s recommendations. Both countries recognised the importance of comparable and reliable data to underpin the net zero transition, enabled by technology solutions such as Project Greenprint, and agreed to explore further collaboration opportunities in this area.
Natural capital and biodiversity -
Both countries agreed on the importance of a globally consistent framework for nature-based disclosures and exchanged views on how the efforts of the Taskforce on Nature-Related Financial Disclosures (TNFD) can contribute to the ISSB’s global baseline. Both countries agreed to collaborate to build capacity and understanding of the potential for nature loss and degradation to generate financial risks and cause adverse impacts to business and society, including through engaging with academia such as the University of Cambridge Institute for Sustainability Leadership (CISL) and the Singapore Green Finance Centre, co-managed by Imperial College Business School and Singapore Management University (SMU).
FinTech and Innovation: The UK and Singapore exchanged views on recent developments in the FinTech sector, including in relation to crypto-assets, and agreed on a number of priority areas for further co-operation.
Crypto-assets sector -
Both countries shared their latest assessments of market developments, opportunities, trends, and longer-term expectations for the crypto-assets sector. They also discussed risks and challenges relating to financial stability, regulatory arbitrage, and shared their progress in strengthening rules on consumer protection and developing the regulation of stablecoins. There was strong agreement on the need to support the safe development of a digital assets ecosystem while ensuring that risks posed by digital assets are consistently managed. Both countries will continue to actively participate in the shaping of robust global regulatory practices through engagement within international multilateral fora such as the Financial Stability Board (FSB), the Committee on Payments and Market Infrastructures (CPMI) and IOSCO.
E-wallets and digital banking -
Singapore provided updates on the progress of its review of e-wallet caps and expected next steps. Both countries discussed the recently released consultation, with the UK providing views on the key proposals. Singapore also updated on the new digital banks that recently launched their operations in Singapore.
The two countries agreed to a roadmap for engagements in sustainable finance, FinTech and innovation, and other areas of mutual interest, leading up to the next Dialogue scheduled to take place in London in 2023.
The UK and Singapore discussed their latest analysis of financial market developments and economic outlook, including how Russia’s invasion of Ukraine has impacted the global economy. Both countries agreed on the usefulness of ongoing exchange of information on this topic, including on financial sanctions.
The Financial Dialogue was co-chaired by Deputy Managing Director (Markets and Development) of the Monetary Authority of Singapore (MAS), Mr Leong Sing Chiong, and Director General (Financial Services) of HM Treasury (HMT), Ms Gwyneth Nurse. Senior officials from MAS, HMT, the Department for International Trade, Bank of England (BoE), Financial Conduct Authority (FCA), and the British High Commission in Singapore attended the Dialogue.
Two industry-led UK-Singapore business roundtables on sustainable finance and FinTech took place on 24 November 2022. Industry participants from both countries participated in this discussion.
a. The sustainable finance Roundtable examined the implementation challenges faced by corporates in meeting their net zero targets, and how the financial industry could help to address these challenges.
b. The FinTech Roundtable discussed the opportunities and challenges faced by FinTech firms, and how these firms could better access overseas markets, including by partnering with financial institutions.
About the Monetary Authority of Singapore
The Monetary Authority of Singapore (MAS) is Singapore’s central bank and integrated financial regulator. As a central bank, MAS promotes sustained, non-inflationary economic growth through the conduct of monetary policy and close macroeconomic surveillance and analysis. It manages Singapore’s exchange rate, official foreign reserves, and liquidity in the banking sector. As an integrated financial supervisor, MAS fosters a sound financial services sector through its prudential oversight of all financial institutions in Singapore - banks, insurers, capital market intermediaries, financial advisors and financial market infrastructures. It is also responsible for well-functioning financial markets, sound conduct, and investor education. MAS also works with the financial industry to promote Singapore as a dynamic international financial centre. It facilitates the development of infrastructure, adoption of technology, and upgrading of skills in the financial industry.
About HM Treasury
HM Treasury is the UK government’s economic and finance ministry, maintaining control over public spending, setting the direction of the UK’s economic policy and working to achieve strong and sustainable economic growth.
The department is responsible for:
public spending: including departmental spending, public sector pay and pension, annually managed expenditure (AME) and welfare policy, and capital investment
financial services policy: including banking and financial services regulation, financial stability, and ensuring competitiveness in the City
strategic oversight of the UK tax system: including direct, indirect, business, property, personal tax, and corporation tax
the delivery of infrastructure projects across the public sector and facilitating private sector investment into UK infrastructure
ensuring the economy is growing sustainably
Definition of Fintech
Computer programs and other technology used to support or enable banking and financial services. "fintech is one of the fastest-growing areas for venture capitalists"
Fintech is a portmanteau of "financial technology", refers to firms using new technology to compete with traditional financial methods in the delivery of financial services. Artificial intelligence, Blockchain, Cloud computing, and big data are regarded as the "ABCD" of FinTech.
The use of smartphones for mobile banking, investing, borrowing services, and cryptocurrency are examples of technologies designed to make financial services more accessible to the general public. Financial technology companies consist of both startups and established financial institutions and technology companies trying to replace or enhance the usage of financial services provided by existing financial companies. A subset of fintech companies that focus on the insurance industry are collectively known as insurtech or insuretech companies.
For more about Fintech go to https://en.wikipedia.org/wiki/Fintech
