Singapore and India to partner on fintech regulation

The financial authorities from Singapore and India have agreed on a cross-border regulatory partnership that will serve as a springboard for growing fintech companies.

In a joint statement announcing the new agreement, the Monetary Authority of Singapore (MAS) and the International Financial Services Centres Authority (IFSCA) promise to facilitate increased regulatory cooperation and partnership.

Both sides hope that setting up a regulatory sandbox will “enable innovative cross-border experiments” and facilitate the research of fresh use cases for fintechs in Singapore and India. This will also provide favourable grounds for idea- and expertise-sharing regarding new fintech concerns, allowing both sides the support needed to safely and effectively drive innovative projects. The MAS and IFSCA will also share more information across their different countries.

According to MAS’ Chief Fintech Officer, Sopnendu Mohanty, “this [cooperation agreement] builds on the Memorandum of Understanding on Supervisory Co-operation signed between MAS and IFSCA in July 2022. The cross-border testing of use-cases between Singapore and India will pave the way for operationalising a broader collaboration framework for fintech use cases involving multiple jurisdictions.”

IFSCA Chief Technology Officer Joseph Joshy is quoted as stating that “this agreement is a watershed moment that ushers in a fintech bridge to serve as a launchpad for Indian fintechs to Singapore and landing pad for Singapore fintechs to India, leveraging the regulatory sandboxes.”

“The possibility of global collaboration on suitable use cases through a global regulatory sandbox is an exciting opportunity for the fintech ecosystem,” he adds.

The partnership between the second-most populous country on the continent and one of the most established financial centres in the area marks a significant turning point for Asia’s fintech ecosystem. Both nations have been noted for their high fintech adoption rates. Figures also show that two-thirds of Singapore’s digitally active user base (67%) and a sizable majority of its Indian base (87%) are all active daily users of fintech solutions.

The excellent credentials of Singapore as a financial centre, which reflect the availability of fintech services provided by banks, insurers, stock brokers, and other established institutions, are evidence of the country’s rapid embrace of fintech. India, with a population of roughly 1.4 billion, is expected to have 96% smartphone penetration by 2040, making it the second-largest smartphone market in the world after China.

A 2017 declaration by the Indian government shows the country’s aim to gradually shift away from paper currency as evidence that government actions are a contributing factor to the increased awareness and adoption of fintech services. The nation is currently home to more than 1,000 fintech companies, with thriving digital centres like Mumbai, Bengaluru, and Gurgaon.

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