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A new agreement between the U.K. and Singapore is the first example of a "fintech bridge", part of a policy announced by the UK Treasury in April this year.
Fintech bridges aim to make it easier for fintech firms and investors to expand to "priority export markets", as well as attract foreign fintechs and investment to the UK. The fintech bridge with Singapore includes a regulatory co-operation agreement between the two countries’ regulators — the UK’s Financial Conduct Authority (FCA) and the Monetary Authority of Singapore (MAS) .
The co-operation agreement enables the UK regulator to refer fintech firms to its counterpart, and vice versa, making it easier for fintechs to scale between countries.
Both countries want to be global fintech hubs amidst growing competition from the US and China. A booming fintech industry is desirable for two reasons: it helps the national economy, and it promotes competition and growth in the financial services industry.
But while both Singapore and the UK boast advantages for fintechs, they are relatively small markets — the UK has under 70 million people, while Singapore has around 6 million. The partnership will create opportunities for fintechs to scale beyond the countries’ borders, making it easier for startups that choose to launch in these countries to attract investment.
Singapore gains a regional advantage. The partnership gives Singapore a direct connection to the UK, which regional competitors like Hong Kong don’t have. MAS’ approach to regulation was recently cited as one of the reasons Singapore’s fintech industry is moving ahead of Hong Kong. This may make it more attractive to UK fintechs looking to expand to Asia.
This deal is the latest example that we’ve entered the most profound era […]
