The Monetary Authority of Singapore (MAS) has unveiled an ambitious commitment of S$150 million, equivalent to approximately $112 million, over the span of three years, to invigorate the Financial Sector Technology and Innovation Scheme (FSTI 3.0).
This funding initiative aims to accelerate the fintech landscape, propelling the adoption of cutting-edge technologies, including projects under the Web3 umbrella.
Details of the fund reveal that the renewed FSTI 3.0 was introduced during the acclaimed Singapore FinTech Festival of 2022 under the leadership of the Deputy Prime Minister and Minister for Finance, as well as Chairman of MAS, Mr. Lawrence Wong.
Singapore has accepted a responsibility to foster the development of the digital economy locally and internationally with such initiatives as this. It has also partnered with the UK to create global regulatory standards for cryptocurrencies and digital assets, aiming to improve financial cooperation.
From FSTI 1.0 to FSTI 3.0
According to the government, the plan for FSTI 3.0 includes the introduction of new tracks to drive financial innovation by having an Enhanced Centre of Excellence track.
Formerly Innovation Labs, this track now includes corporate venture capital (CVC) entities for funding support up to 50% of expenses (up to S$2 million per project). This covers manpower and rental costs. CVCs can mentor start-ups for scaling and resilient business models.
The next step is to have an Innovation Acceleration track. Here, the MAS will partner with the industry for FinTech solutions from emerging tech like Web 3.0.
Grants fund trials and commercialization through open calls for innovative technologies for industry use cases.
The third step is providing an ESG FinTech track. This will back projects addressing ESG data, reporting, and analytics in finance, with up to 50% funding (capped at S$500,000 per project).
Furthermore, the MAS said that the FSTI 3.0 also focuses on AI, Data Analytics, and RegTech adoption. RegTech is the use of technology for enhancing risk management and regulatory compliance in financial institutions.
Also, the fund will help promote the AIDA marketing system in smaller firms and support less digitally mature firms with RegTech. Talent development is emphasized across tracks to strengthen local FinTech expertise.
Mr. Ravi Menon, Managing Director of MAS, notes that FSDF awarded $340 million via FSTI to boost tech adoption in finance.
FSTI 1.0 and 2.0 enhanced the digital capabilities during COVID. FSTI 3.0 aims for continued industry collaboration in meaningful financial innovation.