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Biz / TechTuesday, May 17

Singapore Targets Greater Efficiency

As one of Asia's largest financial centers, Singapore is attracting many fintech companies.

It may not be a household term, but "fintech" could make a big difference in your life. It's short for financial technology, and it's changing how many do business.

A recent business fair served as a showcase for fintech devices.

One of the products on offer looks like a calculator, but it's in fact a terminal for financial settlements. Retailers and taxi companies mainly in developing countries have started using the device.

There was also a watch that has payment functions. Hold it over a settlement terminal -- and your payment is completed instantly.

"Regionally, Singapore is the leader," says Oliver Arscott, an official with Future Bank Asia 2016. "They are really pushing for fintech to become part of the national story, and really to compete with big global markets like London and New York."

Aaron Siwoku is a British entrepreneur who's developing new financial services. He focuses on foreign workers in Singapore, many of whom cannot open bank accounts in major financial institutions.

Sunday is a busy time at Singapore's remittance offices. It's the only day off for the local domestic workers, and they queue up in long lines to send money to their families back home. They use firms that specialize in international money transfers, but often the wait is long.

"Sometimes it takes the whole day," says one customer.

Siwoku has developed a system that allows users to open an Internet bank account. All they have to do is present their passports or another form of identification. Then they can use prepaid cards sold at stores to deposit money into their accounts.

Once that's done, they can send money abroad just by typing in the amount on their smartphones. The transfer cost is about one-seventh of what leading financial institutions normally charge.

"I think the thing that's different about what we're doing at Toast is that we're actually coming in and we are listening to what it is people require," Siwoku says. "We're identifying the problems that need to be solved. And it really is about the flexibility that you have as a startup."

Financial institutions are feeling a growing sense of crisis over the emergence of the new services.

DBS is a leading financial institution in Southeast Asia. In order not to fall behind, it opened a new facility in December to develop related technologies.

"One of the things which have been imperative about this realization of the digital trends that are coming is: we have to innovate. If we don't innovate, we will die. Part of the way to do that is really to collaborate with fintech companies," says Teng Cheong Khoo, Managing Director of Learning and Talent Development at DBS Bank.

There are millions of people in Southeast Asia who are unable to use the regular banking system. Fintech offers them a convenient way to transfer money and settle accounts. At the same time, it is providing a new growth industry for aspiring entrepreneurs.