More Singapore businesses are expected to use fintech products or services in the next 12 months as they strive to improve operational efficiencies, according to findings from a new regional survey by global professional accounting body CPA Australia.
The survey of fintech adoption by companies found that 73 per cent of Singapore businesses expect to use at least one fintech product or service in the next 12 months, compared with 67 per cent of businesses in the past 12 months.
Mobile payments and digital wallets are likely to drive the adoption of fintech, with 42.7 per cent of businesses surveyed saying they believe that these will be used most in the next 12 months. This was followed by robo-advisory/chatbots (23.6 per cent) and open banking APIs (19.1 per cent).
Fintech adoption received a boost from the need to increase efficiency in doing business, with nearly six-in-ten respondents (59.1 per cent) identifying this as an important factor. More than four-in-ten (43.6 per cent ) businesses saw the use of fintech as helping them better understand and improve the customer experience. Just over a third (36.4 per cent) felt the need to adopt fintech as a new way of operating due to disruptions caused by COVID-19.
“With the global pandemic and more challenging business environment, improving efficiency and enhancing the customer experience are essential elements for businesses to sustain themselves and to thrive. More widespread adoption of fintech products and services will help in this respect as consumers become increasingly comfortable with digital financial transactions. Government support of technology adoption and a friendly regulatory environment to position Singapore as a top fintech hub will also be key influences in growing fintech usage,” said Mr Chng Lay Chew, Singapore Divisional President of CPA Australia.
At the start of the circuit breaker in April, the Monetary Authority of Singapore (MAS) urged individuals and businesses to use digital finance services and e-payments as part of safe distancing measures.
Just last week, the MAS also announced that it is committing $250 million to speed up technology adoption and innovation-driven growth in the Singapore financial sector.
But the use of fintech is not without its risks and challenges. The top two factors identified as barriers to fintech adoption were cybersecurity (33.6 per cent) and a lack of fintech understanding within senior management (30 per cent).
“Cyber risks are very real threats to organisations. To mitigate these risks, it is important that senior management and the boards of companies have the relevant expertise to drive the company’s cybersecurity strategy, as well as invest in systems and people to build up cyber defences,” said Mr Chng.