Singapore’s fintech to contribute 3.6% in 2027

In 2022, the country also had the largest investment attractiveness at 41.1%.

Singapore’s financial technology investment is projected to contribute about 3.56% (+2.45%) to the region’s gross domestic product (GDP) in 2027, the largest in the Southeast Asia (SEA) region.

The study, by UnaFinancial, focused on eight Southeast Asian countries: Singapore, Indonesia, the Philippines, Vietnam, Malaysia, Thailand, Myanmar, and Brunei. It initially assessed the share of direct investment as a percentage of GDP in these countries. 

A forecast based on a vector error correction model indicated that by 2027, the share of fintech investments in SEA's GDP could increase fivefold to reach 1.65%. 

Singapore was followed by Vietnam (2.42%, +2.27%), Thailand (2.40%, +2.19%), Indonesia (1.15%, +0.86%), the Philippines (0.31%, +0.18%), Malaysia (0.26%, +0.16%), Myanmar (0.20%, +0.20%), and Brunei (0.03%, +0.03%). 

Globally, this indicator was projected to be 1.07% (+0.82%). 

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Experts anticipated that over the next five years, the return on investment in Southeast Asia's fintech sector would increase, further solidifying its role as a driver of economic growth.

Singapore led the pack with the highest investment attractiveness at 41.05% in 2022, followed by Brunei (22.36%), Myanmar (11.31%), Malaysia (6.47%), and others. 

The overall figure for SEA stood at 8.44%. 

Analysts noted that this distribution correlated with economic performance indicators such as GDP per capita, R&D intensity, and labour productivity.

Regarding the share of fintech in direct investments in SEA, it amounted to 3.82%, with Indonesia taking the lead at 13.52%, followed by Singapore at 2.71%. 

Experts from UnaFinancial explained that Singapore's strong fintech development was due to favourable conditions, while Indonesia's high population presented growth opportunities.

Singapore also exhibited the most significant impact of fintech on GDP growth, with fintech investments accounting for 1.11% of its GDP in 2022, compared to 0.32% in SEA and 0.25% worldwide.