Bots are key to Singapore becoming APAC’s next fintech hub

2021 has been a bumper crop year for fintechs globally, especially for those in Singapore. The past year saw local fintechs receiving a total of US$3 billion in funding, which is a testament to the buoyant investor outlook in this sector.

Demand for fintech services has never been greater as more look to cashless payments and e-commerce services to keep themselves safe amidst the global pandemic. Growing interest in financial literacy – especially among Gen Zs and millennials – have also resulted in a surge of uptake in retail investment platforms and wealth management applications. At the same time, business leaders are reaching for technology that can provide them with a deeper understanding of their financial health at a time of crisis.

Even before this explosion of interest, fintech was already a crowded space. In Singapore alone, it is estimated that there are over 750 entities – accounting for 40% of all fintech companies across Southeast Asia – covering robo-advisory, peer-to-peer lending, ‘Buy Now Pay Later’ services, as well as blockchain and even digital banking.

As demand and adoption of fintech solutions ramp up, we can expect to see new entrants into the market, racing to get a slice of the fintech ‘pie’. Against this competitive backdrop, how are fintechs expected to keep up with their fast and nimble competitors?

One solution is to improve operational efficiency. By saving time and money in back-office processes and reassessing compliance practices, fintechs can better utilise their resources to do the work that will help them stand out and thrive in a highly competitive market.

This is where software automation becomes essential. A software robot manages a computer, mouse, and keyboard like a human, but virtually. The financial sector is rules-based, highly regulated, and data-driven. These factors make the fintech industry an ideal candidate for software automation. Fintech can outsource repetitive, low-value tasks such as data entry, payment, and bill processing to software bots, giving them more time in the day to do work that matters.

In short, this will benefit fintech in two key areas: becoming more competitive and complying with regulations.

Remaining competitive

With its business-friendly climate, stable political environment, and growing reputation as a leading technology centre, Singapore is a natural frontrunner to become the next fintech hub in the region. We can expect more to join the ranks of fintech companies who have set up shop here, and it will be imperative that fintechs look internally to find new ways to stay competitive.

Take the example of a wealth management application. For an employee, uploading global investment information, completing validations, researching business deals, identifying mismatched and pending deals, and generating relevant content are extremely time-consuming processes. Conversely, a software robot can effortlessly scan, extract, and process data from multiple sources 24/7 and automatically update the app as well as customers. 

The benefits of automating these time-consuming tasks are three-fold:

  • First, it saves money by allowing the fintech company to maintain a competitive edge.
  • Second, employees are now free to spend less time collecting and processing data and more time on high-value strategic decisions and complex customer service.
  • Third, the customer has access to the most up-to-date information at all times, which improves the customer experience and thus increases the likelihood of loyalty. 

Software automation can also improve operational efficiency by integrating new fintech solutions with old legacy systems. Although some fintechs have been developed on new platforms, the reality for many companies is that their fintech will need to interact with legacy systems that have been in place for decades. These systems have made large organisations slow to respond to digital transformation, and in some cases prevent them from competing with nimbler fintech startups.

Software robots can seamlessly move data across borders, from one application to another, mimicking tasks such as clicking, typing, and moving between windows. With software automation, organisations with legacy systems can orchestrate alternate workflows and level the playing field without the need to root out and replace their current systems.

Simply put, automation saves time and money by allowing fintechs to focus their resources on innovation and customer service. In such a competitive space and particularly challenging economic circumstances, software automation can give fintechs the boost they need to face the realities of 2022.

Keeping compliant

The threat of sanctions is enough to keep any financial services company on edge. Compliance processes performed by humans are always prone to error, no matter how accurate we aim to be. Software bots, on the other hand, are programmed to follow strictly the same steps every time, and therefore do not fall victim to the same mistakes as humans. 

Software robots make use of artificial intelligence to capture the necessary data and automate compliance reporting to streamline audits, reduce errors, and increase accessible audit trails. If there is an inaccuracy that requires a personal touch or a cycle in the workflow where it is necessary to make a decision, the software robot can shift the responsibility to its human colleague. This ensures that humans ultimately remain in charge of the process without having to do all the legwork.

This in turn allows for better risk management and compliance, greater accuracy, better cycle times, and improved productivity. Without needing to review and approve data provided by consumers, employees, suppliers, and partners, employees can focus on responsibilities that require reasoning and judgement.

Standing out in the current climate is an important undertaking for fintech companies of all sizes. Increasing regulations and shrinking profit margins further aggravate this situation. However, for fintechs that can continue to innovate and provide exceptional customer service, a huge surge in demand awaits.

Intelligent software automation is one solution that can help companies achieve this goal. With the burden of time-consuming back-office and compliance processes shared with software assistants, employees can focus on the work that will help them survive and thrive.