Nurturing A Start-Up Mindset
Being based in Singapore has also been one of the key factors behind M-DAQ’s success, with Koh describing it as the “perfect place to start a business”.
“We have a very open economy as well as a financial system that is recognised worldwide as stable and transparent,” Koh enthuses. “And this has actually allowed us to attract both capital as well as strategic partnerships, and more importantly, to attract talent.”
Singapore’s government agencies have nurtured what Koh describes as a “start-up community mindset” giving support financially and otherwise. In fact, Singapore’s Economic Development Board (EDB) gave M-DAQ a S$1.5 million grant in the company’s early years. And six years later, the EDB ‘s investment arm made its maiden investment in a Singapore-based company and became a shareholder of M-DAQ.
Even though 90% of the company’s business is overseas, the reliability of Singapore’s telecommunications infrastructure enables M-DAQ to conduct most of its business centrally through cloud computing.
All these attributes explain why many start-ups have chosen the city-state to base their headquarters, including unicorn Grab which moved its base from Kuala Lumpur to the city-state.
Global Fintech Village
Specifically, in the realm of financial technology, Singapore packs a powerful punch. The country is likely to emerge as one of top three global fintech hubs in the next two years, according to a survey by US law firm Reed Smith.1 And fintech investments in Singapore have more than doubled to US$365 million in 2018 from US$180 million just the year before, reads a report by Accenture.2
Singapore’s central bank, the Monetary Authority of Singapore (MAS), has been a key champion in securing Singapore’s global fintech hub status through a raft of initiatives including organising the annual Singapore Fintech Festival in November, which attracted 45,000 participants from 127 countries last year, cementing its standing as the biggest fintech event in the world.
“The week-long Festival allows us to network with other businesses, whether it’s upstream supply chain, forge strategic partnerships or find potential investors,” says Koh.
Last year, 380 participating investors, who enrolled in the festival’s deal-making platform MATCH, indicated intentions to invest US$12.2 billion over the next few years.3
The draw of Singapore as an attractive place to hold events such as the Singapore Fintech Festival, according to Koh, is its strategic position at the crossroads of East and West, enabling participants to “harness the best of both worlds”.
“No one feels foreign to this place, even if you come from overseas,” continues Koh. “Whether it’s the food, the people, the culture – Singapore is very dynamic and global. We are almost like a global village.”
Other notable MAS initiatives include being one of the earliest central banks to adopt “regulatory sandboxes” for fintech companies. This allows firms with new ideas to test their products and services in a controlled environment before fully launching them.
Singapore’s central bank has also penned a number of agreements with countries ranging from Japan to the US and Indonesia to bolster fintech ties.
While the MAS is described as a “no-nonsense regulator” by its chief Ravi Menon, managing director at the central bank, it is “highly facilitative of innovation” and wants to “create an environment that promotes innovation but without comprising soundness”.4