How MAS Grants help Singapore Fintech Firms through the COVID-19 Crisis

Data from the WHO asserts that over 6 million cases of Covid-19 have been confirmed in South East Asia. This staggering number accounts for roughly 10% of the entire population of the region.

Singapore has fortunately seen a low mortality rate. But with almost 60 thousand confirmed cases, accounting for 1% of the population, the Covid-19 crisis has still caused considerable damage.

This has led the Monetary Authority of Singapore (MAS) to issue grants and devise schemes to help Fintechs find their way through.

A selection of which we’ve gone over below. First, however, let’s introduce Singapore and the MAS regulatory oversight of Fintechs on the island.

A quick Singapore fact check

The Republic of Singapore is an island nation in the coastal part of Southeast Asia. The two major ethnic groups in the country are Chinese and Malay, occupying roughly 87% of the 5.7 million total population.

Two years after gaining independence in 1965, alongside Indonesia, Malaysia, the Philippines and Thailand, Singapore participated actively in the creation of a group called the Association of Southeast Asian Nations (ASEAN). ASEAN was established to preserve the cultural norms of Southeast Asia and give members further political clout.

Singapore has since grown from a small coastal city-state to a powerhouse in Asia as a whole. Their innovative methods of governance have placed them firmly in the top 3 countries in terms of GDP per capita.

While there’s still some way to go in terms of total GDP, the collaborative effort between the MAS and affiliate agencies has been one of the major telling factors in this growth.

The Monetary Authority of Singapore (MAS)

The Monetary Authority of Singapore (MAS) is a regulatory body that was passed into law in January of 1971.

Since its inception, the MAS has strived to create an enabling environment for businesses to thrive through a mix of healthy regulations and progressive financial policies that encourage growth.

In light of events relating to the Covid-19 pandemic that has put many economies and businesses all over the world in a stranglehold, the MAS strived to mitigate the effect by opening avenues for local businesses to receive some respite.  This came in the form of grants, designed to help alleviate the suffering of affected businesses.

MAS Grants Available to Help the Fintech Industry

With the delicately poised fintech industry standing to be one of the biggest benefactors of MAS grants, we’ve gone over a selection below.

The Financial Sector Technology & Innovation (FSTI) Scheme

On the 29th of June 2015, a S$225 million scheme tagged The Financial Sector Technology & Innovation (FSTI) Scheme was established.

The goal of this scheme was to give Singapore a competitive edge in the technological advancement rat race, through regulations that strengthen the industry’s cybersecurity and the removal of barriers that hinder the adoption of new technology.

In the 2015 version of the FSTI, there was more emphasis on cybersecurity, innovation labs and subtle allusions to cryptocurrency.  2020’s FSTI 2.0 has seen the MAS consolidate on the 2015 scheme, with some improved benefits, aimed at offering fintechs in Singapore the leg-up required.

FSTI Version 2.0

FSTI 2.0, with nearly double the amount of funding, aims to delve deeper into cybersecurity by strengthening the use of Artificial Intelligence (AI) in the financial sector.  Under the FSTI 2.0 scheme, the MAS will cover up to 70% of qualifying project costs, with special emphasis placed on AI projects.

The support to financial institutions, with an emphasis on fintech companies, exists to create an enabling environment for these companies to thrive over the long term.  The MAS has acknowledged the need to develop manpower in this sector through providing this substantial relief package of around S$125 million.

The idea behind FSTI version 2.0 is to ensure that Singapore’s fintech industry, which has been tracking as a global leader over recent years, rises from the ashes once the Covid-19 crisis comes to an inevitable close.

Self-Sponsored Grants

The self-sponsored grants scheme aims to support members of the community that would like to run courses accredited by the Institute of Banking and Finance (IBF).

The grants under this section include the following.

The Training Allowance Grant

Available only to Singapore citizens and permanent residents.

The scheme offers S$10 per training hour for completing training in IBF-accredited courses that commenced between 8 April 2020 and 31 December 2020, while being completed no later than 31 March 2021.

Enhanced Course Fee Subsidy

Available only to Singapore citizens and permanent residents:

This grant disburses 90% of course fee at the end of any IBF-accredited course that commenced between 8 April 2020 and 31 December 2020, while being completed no later than 31 March 2021.

Fintech Employees Grants

The fintech employees grant scheme highlights the MAS support for the staff of firms in the fintech industry. The grants under this section include the following.

The Training Allowance Grant

Available only to Singapore citizens and permanent residents working at MAS regulated or Singapore FinTech Association regulated firms:

The scheme offers S$15 per training hour, for completing training in IBF-accredited courses that commenced between 8 April 2020 and 31 December 2020, while being completed no later than 31 March 2021.

Enhanced Course Fee Subsidy

Available only to Singapore citizens and permanent residents working at MAS regulated or Singapore FinTech Association regulated firms:

This grant disburses 90% of company-sponsored training fee at the end of any IBF-accredited course that commenced between 8 April 2020 and 31 December 2020, while being completed no later than 31 March 2021.

Eligible Hires Grants

Eligible hires grants cater for the salaries of special employment schemes like internships or other developmental programs.

The goal of this MAS grant is to ease the burden on employers by offering up to a S$2,000/month grant to pay the salaries of Singapore citizens employed in MAS regulated or Singapore FinTech Association regulated firms.

This shows the MAS investing in schemes targeting youth unemployment.  An area of the economy that is always hit hardest during a recession.

Industry-Based Grants

A variety of MAS industry-based grants will be disbursed between specific institutions that have a track record of adding value to the financial sector in Singapore.

These grants will look to strengthen innovation through individual research centres and collaborative efforts of financial institutions.

Industry-based grants will offer:

  • 50% for individual financial institutions or 70% subsidy for collaborative ventures. They focus on base salary, consultancy, IP rights, hard/software infrastructure and licences.
  • 50% for individual financial institutions or 70% subsidy for collaborative ventures. They focus on capacity building training courses aimed at employees in the financial sector.

Outside of the eligibility criteria for these MAS industry-based grants, interested parties are also encouraged to apply three months before the start of any course or project that requires funding.

Final Thoughts on MAS Grants Helping Singapore Fintechs

While the various MAS grant schemes look to be highly beneficial to helping Singapore based fintech companies through the Covid-19 crisis, only time will tell.

Executing the plans and ensuring the grants end up in the right hands will pose its own challenges and finding a way to resolve these issues will be a telling factor in the overall success of the MAS response to the pandemic.