How Singapore’s financial institutions are turning a threat into opportunity

How Singapore’s financial institutions are turning a threat into opportunity

Michelle Zhu
06/04/17, 09:00 am

SINGAPORE (April 6): In line with the global trend, 88% of respondents from Singapore’s financial institutions this year see financial technology (fintech) as a real threat to their revenue as compared to just 73% in 2016, according to a new report by PricewaterhouseCoopers (PwC).

Redrawing the lines: FinTech’s growing influence on Financial Services draws on PwC’s 2017 Global FinTech Survey, which is based on the responses of 1,308 participants globally.

Survey participants principally comprised CEOs, heads of departments, heads of innovation, and heads of IT/ digital/technology from 71 countries spread across six regions including Singapore, where there were 40 respondents from a variety of industries including banking, insurance and fintech.

Despite an increasing fear of fintech posing a risk to their revenues, 82% of global banks, insurers and investment managers intend to increase their partnerships with fintech companies over the next 3-5 years – whilst almost 9 out of 10 Singapore respondents indicated the same, notes PwC in a Thursday press release.

The most relevant technologies indicated by respondents in Singapore are namely data analytics (82% vs 72% globally), which is followed by artificial intelligence (44% vs 34% globally).

As data and analytics are fundamental to the adoption and innovation of more advanced technologies, in PwC’s view, it is “unsurprising” that this field emerged as the top technology that industry players intend to focus their investments on in the next 12 months, both in Singapore and worldwide.

Of the opportunities related to the rise of fintech, expanding products and services emerged as the number one opportunity in Singapore (60%) as well as globally at 62%. Notably, a larger proportion of industry players in Singapore (45%) recognise leveraging fintech to differentiate their business as an opportunity compared to their global peers (29%).

PwC believes the data is indicative of a mutual understanding between Singapore’s financial institutions and fintech businesses, where it is recognised that partnerships between the two can facilitate more effective innovation than either alone.

“On one hand, fintech companies can benefit from financial institutions’ existing processes and infrastructure which would otherwise be too costly for them to undertake on their own. On the other hand, incumbents can leverage the innovation and new technologies from fintech players to overcome legacy issues, sharpen operational efficiency and respond to customer demands for more innovative services,” explains the multinational professional services network.

 Antony Eldridge, fintech and financial services leader, PwC Singapore, notes the city state regulator’s “progressive approach” which he believes helps to nurture fintech by providing a “conducive ecosystem”, such as through its introduction of regulatory sandboxes that allow experimentation on new technologies while minimising risks to consumers.

“The [survey] results indicate that there is real room for growth in Singapore’s FinTech ecosystem, which comes at a good time as we are also noticing a growing acceptance of non-traditional FinTech solutions by consumers. That, in turn, is driving FinTech solutions to grow beyond low value, high volume to address more advanced and complex needs of client groups such as in asset and wealth management,” says Eldridge.

Ex-remisier Ng denies being coached; RHB trader Alex Chew admits to telling the whole truth only in third statement

SINGAPORE (Apr 23): In Day Six of the trial of John Soh Chee Wen, the defence wrapped up their cross examination of the prosecution’s first witness, former OCBC Securities remisier Ng Kit Kiat. Ng had on Monday admitted to having performed trades without third-party authorisation. The trades performed without third-party authorisation included those based on orders given by a certain Ang Cheau Hoon Alice and Kent Eng Peng Huat, both of whom are remisiers at UOB Kay Hian, for accounts held by Ang's husband Poh Sian Hong as well as Eng's wife Yew Yong Mei. When asked by Soh’s defenc....

Singapore's pre-election cabinet change sets Heng up for top job

(Apr 23): Singapore’s Finance Minister Heng Swee Keat was promoted to deputy prime minister on Tuesday, a move that further positions him to succeed Prime Minister Lee Hsien Loong. Heng will become Lee’s deputy on May 1 while retaining the finance post, the prime minister’s office said in an emailed statement. He will also continue chairing the Future Economy Council and National Research Foundation. The sole cabinet promotion bolsters the odds that 57-year-old Heng will be the ruling People’s Action Party’s choice for prime minister after the general elections, which may come ....

OUE dumps stake in Nuvest Capital with no profit or loss

SINGAPORE (Apr 22): OUE announced it had sold its 33% stake in Nuvest Capital for US$1 million ($1.36 million). The buyer was Aje Kumar Saigal who owns the other 67% of Nuvest Capital. OUE acquired its 33% stake in Nuvest Capital in 2015 for US$1 million, so it has neither made a gain nor a loss. But in 2014, OUE invested US$200 million in Nuvest Real Return Fund which is managed by Nuvest Capital. Last Nov, OUE’s executive chairman had told analysts that the company plans to redeem the fund soon as it had not been profitable. In its FY2014 annual report, OUE's investment in t....