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The UK and Singapore have signed a new Memorandum of Understanding (MoU) on fintech collaboration and financial cooperation, building on several major partnerships that have been rolled out since 2016.
At the seventh UK-Singapore Financial Dialogue held last week, the two countries signed a FinTech Bridge MoU that will lead to closer cooperation in terms of trade, investment, innovation and regulation.
In a statement, the Monetary Authority of Singapore (MAS) said the FinTech Bridge aims to support continued growth and policy alignment in areas such as payments, regtech and wealth management.
The FinTech Bridge will provide “structured engagement” that will allow policy actions and assessments to be coordinated by both government and industry stakeholders.
The MAS said coordination will be key on emerging issues such as data sharing, mobile payments and distributed ledger technologies (DLT).
“Both countries strongly welcomed this deepened co-operation on FinTech and the opportunities the industry can deliver in relation to financial inclusion, enhanced innovation, and improved outcomes for consumers,” said the MAS.
Prasad Thandapani, legal analyst for Southeast Asia at VIXIO, said he believes the FinTech Bridge MoU marks a “significant” development in terms of cooperation between the two nations.
“Post-Brexit, the UK has been looking further afield in terms of trade, and an agreement with Singapore — which is already a significant trading and defence partner — seems like a natural and prudent step,” he said.
In 2021, the total value of goods and services traded between the UK and Singapore was £17.2bn, up from £16bn in 2020. According to UN COMTRADE data, Singapore was the 14th largest recipient of UK exports.
“Also, with the exodus of British and other foreign companies from Hong Kong over the past few years, Singapore is quickly becoming the premier financial centre in Asia, with favourable corporate tax rates that make it even more attractive,” said Thandapani.
Singapore’s corporate income tax is currently set at 17 percent for both local and foreign companies, but significant exemptions are available both for new start-ups, within their first three years of operation, and small businesses with lower revenues.
Both countries also recognised the importance of the UK-Singapore Digital Economy Agreement (DEA) that was signed in February, and the principle of the free flow of data that it enshrined.
As a result of the agreement, businesses and consumers are expected to benefit from open digital markets, guaranteed tariff-free flow of digital content and guaranteed protections for personal data and intellectual property.
The FinTech Bridge MoU also builds on three earlier agreements between the two countries.
These include the Treasury-MAS MoU on Financial Services Regulatory Cooperation, signed in 2021; the Free Trade Agreement, signed in 2020; and the Co-operation Agreement between the MAS and the Financial Conduct Authority (FCA), signed in 2016.
Shared priorities
During the Financial Dialogue, the MAS said the two countries exchanged views on recent developments in the fintech sectors, and agreed on a number of priority items for further cooperation.
The first was crypto-assets, where both countries shared progress on strengthening consumer protections and developing rules on stablecoins.
There was also “strong agreement” on the need to support the safe development of a digital assets ecosystem, while ensuring that risks posed by digital assets are consistently managed.
Both countries said they will continue to actively participate in the shaping of “robust” global regulatory practices through engagement within international fora, such as the Financial Stability Board (FSB), the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO).
The second priority area was e-wallets and digital banking. The MAS said it provided updates to its UK counterparts on its latest proposals to raise the caps on e-money accounts, as well as new digital bank developments, such as the recent launch of banking services by the taxi hailing app Grab.
Finally, both countries discussed their interest in promoting sustainable finance and net-zero transition finance.
They also affirmed their “strong commitment” to the implementation of climate-related disclosures for businesses via the International Sustainability Standards Board (ISSB), an international nonprofit organisation.
