Singapore Wants to Boost Its Fintech Startupsby and
Lags behind Silicon Valley, London, New York in some areas
Central bank head speaks at launch of new fintech initiative
Singapore is reviewing the rules for venture capital firms as it attempts to draw more capital to the country’s financial technology startups, according to the head of Singapore’s central bank.
Though Singapore rivals other major fintech centers such as Silicon Valley, London or New York in terms of startup activity and innovation, it still lags behind in terms of the firms’ access to capital, said Ravi Menon, managing director of the Monetary Authority of Singapore.
"I think we can solve our financing problems, because of the rate we are encouraging VC funds to set up here, and we are also reviewing some other regulatory requirements that we place on VC funds," Menon said. "We just started the review so I can’t say more, but hopefully this will facilitate more of them to come here," he added.
Singapore is trying to encourage investment in financial technology to boost its role as a regional banking hub. Last year, MAS set up a FinTech & Innovation Group to promote the sector, hiring former Citigroup Inc. banker Sopnendu Mohanty to head the in-house unit. The central bank has also committed to invest S$225 million ($167 million) over five years in fintech projects.
Menon was speaking at a Wednesday event to launch a new MAS initiative, known as "Looking Glass," which is aimed at helping entrepreneurs build their businesses with help from regulators, lawyers, bankers and others. "Money is one thing, but how does the entrepreneur navigate the system?” Menon said.
The MAS wants to improve the flow of capital to entrepreneurs, but it is also mindful of the opposite danger, that local startups are flooded with funds, a process that typically leads to inefficiency and mis-allocation of capital.
“We don’t want too much money chasing too few ideas, we need to be mindful of that,” Menon said. “Civil servants can be better at giving money, but you can’t tell a startup how to run a business, you need people who have run a business to tell them that.”