FinTech start-ups urged to work on a ‘smart world’

SINGAPORE — Panellists at the Singapore-France Innovation Forum yesterday called for greater integration and collaboration across the whole of society and among countries in order to reap the full benefits of technology.

Right now, countries and organisations are working in silos, including in the financial technology (FinTech) sector, and while several countries have embarked on Smart City initiatives, what is needed is a “Smart World”, as one panellist put it.

The panel — comprising senior officials from the public and private sectors of both countries — discussed emerging opportunities in areas such as FinTech, smart cities, health, aerospace and start-ups.

Monetary Authority of Singapore chief FinTech officer Sopnendu Mohanty, who was among the panellists, said: “One of the things I would think differently when it comes to FinTech and the financial sector is that we should not think about smart cities but think about the smart world. This sector is so interconnected that thinking about smart cities is counter-productive.”

He noted that worldwide, only some 5 per cent of FinTech companies have managed to scale up and venture out of their countries, because of a lack of regulatory alignment and common infrastructure in the global banking and financial sector.

Governments should join hands on issues such as “know your customer” infrastructure, which involves, among other things, managing and exchanging standardised data. “If you can solve this structural issue, FinTech will be much bigger,” Mr Mohanty said.

He urged start-ups to get into the FinTech space for what he called the “FinTech 2.0” phase. “FinTech 2.0 is about breaking the banking sector into smaller modular structures and if you do that, it opens up the complete restructuring of the middle office, back office and core sector that support the broader financial services,” he said. This segment is worth some S$500 billion and could pave the way for larger scale cooperation between Singapore and France given the latter’s strong base of engineers, Mr Mohanty added.

Mr Frederic Oru, international director at Numa, which is a Paris-based shared work space and start-up accelerator, said that start-ups must look at solving important issues and that their solutions must be global in nature in order for their projects to be scalable. “Working with corporates is a good way to go,” he added.

Agreeing, Mr Philip Lim, chief executive officer of A*Star’s commercialisation arm Exploit Technologies, stressed the need for start-ups to work with larger companies in order to understand what customers want. “We have started to emphasise a lot more corporate involvement in start-ups ... it helps in building deeper insights and posts new challenge to the teams,” Mr Lim said.

Nevertheless, Mr Mohanty highlighted a concern with FinTech start-ups working with larger banks. In some case, banks are taking start-ups under their wings, putting them “in labs on a free proof-of-concept basis” and making them “bleed cash”.

“Banks have the responsibility to actually have a meaningful engagement with start-ups or else they could kill this industry instead of helping them,” he said.