Singapore and Australia are looking to further drive their collaboration in fintech and support each other's local ecosystem. The two partners will establish a framework to "deepen" bilateral cooperation and for joint innovation projects.
The new Australia-Singapore FinTech Bridge Agreement would pave the way for stronger bilateral cooperation in fintech, said Australia Treasury and Monetary Authority of Singapore (MAS) in a joint statement Wednesday.
The two industry regulators would look to facilitate trade and investment in their respective fintech sector as well as boost ties between policy officials, regulators, and industry groups.
Efforts also would focus on supporting the establishment of fintech companies in each other's market, where these businesses would be able to tap available facilities and help that aimed to create new market opportunities and reduce barriers to entry.
In addition, the fintech agreement would explore joint innovation projects in emerging areas, such as blockchain, digital identities, cross-border data connectivity, data portability, and sustainable finance.
Work to deepen the two countries' collaboration in fintech kicked off last June when Singapore Prime Minister Lee Hsien Loong met with Australian Prime Minister Scott Morrison. The discussion followed the establishment of a digital economy agreement between both countries in 2020.
Elaborating on the importance of the Fintech Bridge Agreement, the two industry regulators said in their joint statement that the bilateral agreement strengthen policies and support cross-border growth of the industry.
Citing figures from FinTech Australia, they noted that there were more than 700 fintech companies located Down Under where the sector was expected to grow from AU$250 million ($186.48 million) in 2015 to AU$4 billion ($2.98 billion) last year.
Singapore, too, was home to some 1,400 fintech companies with 40 innovation labs.
Investments in the city-state's fintech sector grew 47% year-on-year to hit $3.94 billion in 2021, according to KMPG's Pulse of FinTech report. Blockchain and crypto raked in almost half of the funds, raising $1.48 billion across 82 deals.
Singapore and Australia are amongst four central banks currently collaborating to develop and test a common platform on which to process cross-border digital payments. Announced last September, the initiative aims to bypass the need for intermediaries and, hence, slash the time and cost of such transactions.
Working alongside the Bank for International Settlements' (BIS) innovation hub in Singapore, the four central banks are looking to build prototypes of shared platforms using multiple central bank digital currencies. They aim to enable financial institutions to transact directly with each other in digital currencies issued by the respective central bank.
The central banks of Malaysia and South Africa also are part of this initiative.