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Singapore and Indonesia strengthen FinTech cooperation

Singapore’s leaders are in Bali, Indonesia for the Singapore-Indonesia Leaders’ Retreat. Singapore’s Prime Minister Lee Hsien Loong is present at the retreat, together with the Indonesian President Joko Widodo. On the agenda at the Retreat is a review of the progress made in bilateral relations, as well as a discussion of ways to deepen cooperation between the countries. Multiple Memorandum of Understandings (MoUs) are being signed at this retreat.

Yesterday, OpenGov reported on one of the many MoUs being signed. Today, we highlight another between the Monetary Authority of Singapore (MAS) and the Financial Services Authority of the Republic of Indonesia, Otoritas Jasa Keuangan (OJK). The MoU was signed on 11 October 2018. The intent of the MoU is to strengthen bilateral cooperation in the development of FinTech, as well as to encourage innovation in financial services between both countries.

Terms of the MoU

Under the MoU, both countries will work towards the sharing of information on emerging FinTech market trends and developments. The partners will also promote joint innovation projects.

To ensure that the FinTech companies are governed and are aware of the unique regulatory regime and opportunities each country possess, both authorities will work towards establishing a framework. In doing so, it is hoped that the barriers to entry for entering each other’s markets are kept low.

Both country’s financial authority representatives are eager for the closer collaboration.

Mr Wimboh Santoso, Chairman of Indonesia Financial Services Authority, said, “We look forward to fostering a closer collaboration with MAS to support the development of FinTech and innovative financial services across the two jurisdictions.”

Echoing the Indonesian counterpart’s enthusiasm is Mr Ravi Menon, Managing Director of MAS. He said, “Singapore and Indonesia have vibrant FinTech sectors, and MAS and OJK share a common interest in promoting innovation in financial services to enhance financial inclusion within the region. This MoU presents a good opportunity to strengthen cross-border efforts to promote the FinTech ecosystem in ASEAN.”

FinTech in ASEAN

According to one study, FinTech in ASEAN is booming. With a young and tech-savvy population, combined with the supporting internet infrastructure, business opportunities for FinTech companies abound.

Digital payments in Indonesia is growing. Currently, there are 262 FinTech companies in the archipelago. Just across the straits, Singapore is renowned by the study as Asia’s FinTech hotspot. Outshining the rest of its regional counterparts, there are a cool 490 FinTechs bustling in the island. Despite the discrepancy, both countries are paving the way for FinTech in ASEAN.

Singapore and Indonesia also host the greatest number of incubators, accelerators and innovation labs, compared to the rest of its regional counterparts. Singapore has 52 and Indonesia has 20.

The huge investments pouring into the region backing FinTech companies suggest that the MoU is timely. According to the study, FinTech companies are confident in a growing number of opportunities in home markets and abroad. However, there is concern that new regulations will stifle their growth and success.

Should FinTech take the region by storm, the study suggests that government regulation and policies must underpin. Mutually agreed frameworks will reduce friction in operation, encourage shared growth, and mutual progress.

For more information on the region’s approach to FinTech, click here.

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