Breccan Mcleod-Lundy
By Breccan McLeod-Lundy
CEO

Fintech in Singapore

Last week I attended the Fintech Festival in Singapore. With over 25,000 attendees, it’s one of the largest financial technology events in the world, bringing together an impressive cross-section of enterprise, startups, and government. With funding from the MAS (Monetary Authority of Singapore), plenty of sponsors, and ticket sales on top, it was certainly better funded than anything that is even possible in New Zealand. It was a fascinating reminder of how far New Zealand still has to go for us to be recognised for our technology rather than our sheep (one older lady at the conference literally made a sheep noise followed by a comment about hobbits when I told her I was from New Zealand).

The first day of the festival was mostly dedicated to their innovation lab crawl, 25 organisations had open hours and presentations across the city demonstrating their innovation efforts. This was in some ways the most eye opening in terms of what Singapore has done differently from other cities in attracting corporates and getting them involved in the local ecosystem in a way that produces long term benefits to Singapore.

By incentivising innovation labs to be formed in the city, there is starting to be a critical mass of entrepreneurial types working with and within the larger corporates, something which I believe is critical to the success of many of the most exciting possibilities of Fintech. Many relatively early stage companies are being invited in to partner with banks or professional services firms much earlier in their development and being pointed directly at clients and problems that the money is already there to solve. In comparison, I’ve seen startups in New Zealand having to prove themselves much more before the corporates start partnering or offering up their data, which creates a chicken and egg style problem of how does a young company prove itself capable of handling large clients without having large clients to handle.

Bitcoin mining

Image 1: Bitcoin mining rigs for sale - selling picks to miners is the best way to get rich after all.

There is a significant difference between accelerators and the innovation labs. While there are accelerators in Singapore and certainly there are more incentives around funding and tax breaks than are available in New Zealand, our accelerators are generally focussed on coaching and giving companies a push rather than the long term relationships that are often necessary in enterprise startups where the sales cycle may already be significantly longer than the average accelerator. In Fintech particularly this is important as so many of the potential startups face long sales cycles or regulatory delays. So the slightly more patient approach of the innovation labs to try things and share data without going deep on business creates more opportunities for B2B startups in particular.

While talking to individuals throughout the labs and the conference, there was a difference in the level of understanding of business and startup practices. Whereas in New Zealand the best you’re likely to find from most people in tech is that they might have attended a start-up weekend once, in Singapore nearly everyone involved seemed to have a solid understanding of concepts like product, growth, investment returns on growth companies (something NBR commenters still don’t understand), etc. More people being able to talk in a nuanced way about startups makes the conversation better; I’m not sure what the answer is for New Zealand but I think a big part is changing how we talk about companies. Particularly with growth companies the discussion seems to oscillate between terrible (they’ve taken all the investors money and there’s not even any profits) and acclaiming (look at this kiwi taking something to the world), with little nuance and little analysis of what’s actually happening in our startups. You can even see this in the last couple of weeks with Xero’s complaints of the lack of analysis available in the New Zealand market, even for huge companies by our standards.

christmas in singapore

Image 2: Christmas in Singapore.

The rest of the conference really had two parts, a trade show and the conference talks themselves. The trade show was frankly excellent, especially walking around the huge number of start stalls which often had a founder or senior staff member hanging around and open for discussion. If you want a good view of what’s happening in Fintech just walking up and down the aisles gets you a chance to talk to multiple different startups in all of the major new Fintech spaces from blockchain, to compliance, to better solutions for managing pocket change. From my point of view, spending a day wandering the show floor would be worth the admission by itself. There’s a good mixture of businesses that are potential partners and ideas that just need to be brought to New Zealand.

The actual conference part of the festival was the weakest part in many ways. With such a huge collection of sponsors and fascinating people, the organisers had been spoilt for choice and tried to solve their scheduling with the application of endless panel discussions. Unfortunately, panels are notoriously unpredictable and have a bad habit of meandering. Some of the discussions were excellent and there were some fascinatingly consistent messages - blockchain probably good, ICO’s probably not etc - but in general too many of the panel sessions got stuck in the weeds. Or perhaps I’m just spoiled by the way the focused style of Webstock has affected the rest of the tech conference scene in NZ.

There were also dozens of smaller events happened in parallel, from an entire two-day blockchain conference to a fair amount of national bodies putting work into better connecting with their overseas counterparts. On the first night, FintechNZ signed a general MOU with the equivalent organisations all across ASEAN (the Association of South East Asian Nations) and then created at least two more reciprocal agreements before the week was out to encourage travel and cross pollination.

One thing that we are doing particularly well is having a healthy discussion between government and Fintech about where the lines are in terms of maturely handling regulatory constraints. Fintech companies were always very excited when they met Poppy Haynes from MBIE who has been involved in writing and advising on the policy side of some of the new regulations. Many of these companies are eager for regulators and policy writers that engage constructively with them, as at the moment their businesses are operating in grey areas where they just wait to find out if they’ll be blessed or damned. The more we can sell the regulatory and policy side of New Zealand as strong and approachable, the better case we have for attracting Fintech startups to New Zealand to try interesting things here.

Having said that, there are a lot of constraints in Singapore that we don’t have here: their senior talent squeeze is much tighter than ours, Singapore doesn’t have as many obvious next markets as New Zealand, various measures say we’ve got a more creative workforce, and we’ve got a bunch of cross-industry possibilites with areas like Agtech (back to the sheep) that just aren’t possible in Singapore.

We shouldn’t set out to be Singapore but we should definitely aim to have the reputation to attract businesses and investors to view us as a place they should seriously engage with when it comes to technology and innovation.