London’s loss of fintech crown?
Singapore’s lucrative FinTech sector looks poised to grow as rivals around the world struggle with regulatory challenges and political upheaval, according to a new report from ACCA (the Association of Chartered Certified Accountants).
The report, FinTech — transforming finance, finds that while FinTech’s impact on finance and banking is proving to be as revolutionary to the sector as the internet has been for other areas of the economy. Regulatory issues in the US and Europe, as well as the potential disruption caused to London by the Brexit vote, positions Singapore at the heart of global growth.
Joseph Alfred, Head of Policy & Technical, ACCA Singapore notes that Singapore’s already flourishing FinTech sector may well hugely benefit as other markets face challenges that are providing some push-back to the unbridled growth of Fintech in earlier years.
“While Silicon Valley offers the US banking industry a significant head-start in adopting new technologies, progress has been slowed through legislative and licensing hold-ups. Meanwhile, the potential for UK banks to lose their pass-porting rights following the vote to leave the European Union poses real uncertainty about the future of FinTech in London. Singapore, on the other hand, is benefitting from a supportive regulatory framework and extremely high digital capacity, which means there is a potential for her to become the regional hub for Asia-Pacific and beyond.”
A co-operation deal was signed earlier this year between the Monetary Authority of Singapore (MAS) and the UK’s Financial Conduct Authority (FCA). It has been dubbed ‘the FinTech bridge’ for the benefits it can bring to Singapore finance.
Ng Boon Yew, Executive Chairman, Raffles Campus Pte Ltd and Chairman, ACCA Accountancy Futures Academy, highlights that the rise of FinTech is good news for the accountancy profession.
He says “While the rise of FinTech will reduce the labour time of much contemporary finance work, the fast-evolving nature of technology adoption will also necessitate transformations in tax compliance, audit and reporting processes. This will in fact place greater emphasis on the importance of having forward-thinking professional accountants equipped with a strong digital understanding and global vision to guide firms through the opportunities and challenges ahead. Understanding the intricacies of global best practices and adapting them for varying national contexts can set aspiring FinTech hubs on a course for success, and highly skilled accountants will be vital to that process.”
Professional accountants are adapting to and seeing opportunities for expansion in FinTech. For example, bookkeeping has been completely automated and cloud accounting platforms are now universal. New Zealand-based Xero provides a cloud-accounting and reporting platform, while Receipt Bank, from the UK, enables invoices and receipts to be processed via smartphone photos and email.
The plethora of rules facing FinTech companies also presents an opportunity for finance professionals. For example, Kingston Smith, an accountancy practice in the UK, has a dedicated team of FinTech accountants to help with the specificities of compliance, audit and tax. The firm’s roster is complemented with advisers to assist companies in developing processes and structures suited to the rigours of the sector.
Accounting entities in Singapore; particularly those in multi-disciplinary practices, with accountants and lawyers working together, could consider harnessing the momentum of growth in the Fintech sector to expand accountancy services to support this sector.