According to the report Connecting Global FinTech: Hub Review 2016 recently issued by Deloitte, the global top five fintech hubs in 2016 are London, Singapore, New York, Silicon Valley, and Hong Kong.
Hong Kong ranks fifth and Singapore has moved up to the second place, overtaking New York. South Korea comes sixth right after Hong Kong, and Shanghai is in the eleventh place.
Deloitte believes that Singapore moving up to the second place surpassing New York is mainly attributed to the strong support from the Government, as evidenced by the S$225 million committed to the development of fintech projects.
Soon to be Number One?
Other initiatives include the Regulatory Sandbox, Strategic Electronic Payments, International Technology Advisory Panel and Talent Development. All these initiatives imply that Singapore may be a serious contender for the global No.1 spot in fintech.
The Monetary Authority of Singapore is also hosting the Singapore Fintech Festival this month.
Key Barometers
The report «Connecting Global FinTech: Hub Review 2016» draws on three indicators for the rankings:
- Global Financial Centers Index (GFCI)- considers the business environment, financial sector development, infrastructure, human capital, and reputational factors.
- Doing Business (DB)- presents indicators on business regulation and the protection of property rights.
- Global Innovation Index (GII) - indicates the innovation of different cities.
Deloitte believes that Hong Kong, which is a long-established financial center, ranks highly on the GFCI yet lower than that of London, Singapore, and New York.
Although higher than London and New York in terms of DB, Hong Kong has the lowest GII among the five cities. «In fact many small and medium-sized enterprises in Hong Kong may not be well served by banks and large financial institutions. Therefore, they may expect services from emerging fintech companies, including e-commerce, payment, microcredit, crowdfunding, and other platforms,» said Freddie Chui, Deloitte China Southern Region FSI Leader.
A Proactive Approach
Deloitte fintech Consulting Partner Paul Sin (pictured) holds that many disruptive innovative technologies such as blockchain will inevitably threaten the existence of some traditional financial organizations. Thus, support from the Government is necessary to sustain a leading position in the GFCI.
Fully aware of this fact, the Singapore Government has taken some proactive measures such as the establishment of the blockchain platform for trade financing, skipping the time-consuming processes including private financing, educating the market, and individual sales.
