Published on November 9, 2023, 5:34 am
The origins of FinTech can be traced back to the Global Financial Crisis of 2007 to 2008. During this period, traditional financial institutions faced significant losses and required government assistance to stay afloat. Simultaneously, there was a rapid growth in mobile technology, which gave rise to a new generation of financial institutions.
The emergence of Web 2.0 provided opportunities for FinTech companies to leverage mobile, social, and cloud technologies. Since then, the FinTech industry has experienced unprecedented growth.
In 2021, global venture financing in FinTech reached a record high of $620.8 billion. This marked a significant increase from the previous year’s total of $294 billion, demonstrating a remarkable 111% year-over-year growth.
However, as market liquidity increased and fundraising reached new heights, the beginning of 2022 brought about some challenges. Both public and private markets experienced a mean reversion in growth rates, leading to reduced valuations and underwhelming IPO performances across various tech sectors. As a result, the term ‘unicorn’ as a metric or term for success is being questioned.
Valuation has always been subjective in financial markets where optimism prevails over cautionary realities. It is crucial for FinTech companies, especially startups, to reassess their valuations and rethink their business strategies accordingly.
The landscape of the FinTech industry is constantly evolving. As Bob Dylan famously sang, “The Times They Are A-Changing.” In order for companies in this industry to survive long-term, they must urgently adapt by implementing quick and strategic measures that promote adaptability.
Discussions on these topics will take place at the upcoming Singapore FinTech Festival (SFF) from November 2nd to 4th, 2022. The SFF is recognized as the world’s largest and most impactful FinTech festival and serves as a knowledge platform for the global FinTech community.
Organized by Monetary Authority of Singapore (MAS) and Elevandi, a nonprofit entity established by MAS to connect people and businesses in the FinTech sector, SFF aims to create an open dialogue and a safe environment for FinTech businesses to not only survive but thrive.
Since its inception in 2016, the annual theme of SFF has been carefully selected to reflect the prevailing opportunities and challenges in the financial sector. This year’s theme is “Building Resilient Business Models amid Volatility and Change.” It offers thought leaders an opportunity to exchange insights and build relationships that extend beyond mere business transactions.
The festival brings together government leaders, regulators, financial services executives, entrepreneurs, investors, and technology experts from around the world. They will engage in knowledge-sharing sessions focused on building viable, responsible, and inclusive FinTech businesses that can adapt to today’s rapidly evolving landscape.
In the aftermath of recent uncertainties, FinTech firms must ensure they adopt the right business models and infrastructure to position themselves for future success. However, beyond profits and economic growth, businesses need a greater purpose – improving people’s lives.
One example of this is the rise of open banking which demonstrates how collaborations between public and private sectors can benefit marginalized communities. Furthermore, cybersecurity measures need to be strengthened to protect against potential threats.
In an increasingly interconnected financial world, Elevandi seeks to foster open dialogue between public and private sectors. While navigating this digital economy may present challenges, collaborations can help build a sustainable ecosystem in the long run.
The future of FinTech lies in adapting to changing dynamics while serving a larger societal purpose. By attending events like SFF and embracing collaboration across sectors, companies can position themselves for success amidst volatility and change.
Reference: Strategies to adapt to survive in 2023