FinTech Firms Face Compliance and Regulatory Hurdles in Singapore

The Singapore FinTech Association (SFA) has launched the Fintech Service Providers’ Compliance Readiness Framework to promote sustainable outsourcing relationships between financial institutions (FIs) and FinTech service providers (FSPs). The framework aims to ensure that FinTech companies meet minimum compliance requirements, increasing confidence among FIs.

Overview of the Framework

The framework was developed in collaboration with professional services firm PwC. It outlines a set of controls and procedures that FSPs must implement to demonstrate their compliance readiness. According to SFA, the framework is designed to help FSPs identify gaps in their internal controls and provide recommendations for improvement.

Voluntary but Recommended

While the framework is voluntary, FinTech companies are advised to undergo an independent third-party assessment to provide additional assurance to FIs. As a spokesperson for SFA noted, “Having an independent party assess our compliance with the framework will not only increase confidence among FIs but also differentiate us from competitors.”

Key Areas Covered

The framework covers various areas, including:

• Physical security
• Access controls
• Data backup and recovery
• IT system security

FinTech companies are required to assess their own control environments against these requirements and identify gaps where necessary.

Industry Response

Industry observers note that the framework is a welcome development in Singapore’s FinTech landscape. “Compliance is an increasingly important issue for FinTech companies as they expand their services and operations,” said an industry expert. “The SFA’s initiative will help ensure that FSPs are better equipped to meet regulatory requirements and increase confidence among FIs.”

Support from PwC

PwC, which provided technical expertise in developing the framework, offers advisory services to assist FinTech companies in assessing their compliance readiness. The firm also performs agreed-upon procedures and independent attestations against the framework’s requirements.

Future Plans

Moving forward, SFA plans to review and refine the framework as needed to ensure it remains relevant and effective in promoting compliance among FinTech companies. As a spokesperson for SFA noted, “Our goal is to create a robust and sustainable ecosystem for FinTech companies in Singapore. We believe that this framework will play a critical role in achieving that objective.”