Singapore pledges $32m to help regtechs take POCs to market
The Monetary Authority of Singapore (MAS) has pledged SGD 42 million ($32 million) to help regtech fintech start-ups take proof-of-concept (POCs) to market.
The capital injection will underpin two schemes. One is the new Regulatory Technology (RegTech) grant scheme. Whilst the other, created last year as a reaction to the COVID-19 pandemic, is the Digital Acceleration Grant (DAG) scheme.
Both are part of the Financial Sector Technology and Innovation Scheme (FSTI 2.0), worth SGD 250 million ($188 million).
The MAS launched FSTI 2.0 in August 2020, committing to a three-year-long period of capital investments in Singapore’s fintech start-up sector.
Sopnendu Mohanty, the regulator’s chief fintech officer, said in a LinkedIn post: “Regtech solution providers find it difficult to gain market share and spend much of their resources on free POCs that sometimes go nowhere.”
He brands this state “Valley of the Vanishing POCs”. Instead, he wants to “move all these experiments” to a new valley he dubs “Valley of the Valuable POCs”.
The new regtech grant is available to any company which classes itself as a Singapore-based financial institution (FI).
Its aim is to promote the adoption and integration risk management and compliance-focused technology solutions developed by fintech start-ups.
The regulator has split the scheme into “two tracks”. One focuses on pilots. FIs can secure funding through the grant to pilot their solution, “before embarking on full-scale integration of the product into its operating environment”.
Fintech start-ups can secure up to SGD 75,000 ($56,000) for their pilots. When it comes to large scale production projects, the second of the two tracks, FIs can apply for up to SGD 300,000 ($226,000) in funding.
“Both tracks can be used to support either in-house development or commercial partnerships with regtech firms based in Singapore,” the regulator states.
Boosting the DAG scheme
In April 2020, the MAS launched the DAG. It is capped at SGD 120,000 ($90,000) for each fintech start-up. And formed part of the regulator’s SGD 125 million ($87.8 million) coronavirus care package.
Companies with less than 200 employees could tap this grant specifically to adopt fintech solutions.
The MAS will now commit an additional SGD 30 million ($26 million) towards the scheme following what it describes as “a strong response” since its April 2020 launch.
It has also added life insurance and general insurance agencies to the list of companies eligible for the grant.
As of end-March 2021, MAS says it has received 1,100 applications for the grant.
Total grants available under the DAG scheme now sit at SGD 65 million ($49 million).