Focus on fintech – regtech funding and a Singaporean sandbox

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The Singaporean financial watchdog has announced the guidelines of its regulatory sandbox which it hopes will encourage experimentation in financial products and services while a new survey suggests investment in regtech, a fintech offshoot, is set to achieve a new record in deal activity this year.

The guidelines from the Monetary Authority of Singapore (MAS) follow the lead of the UK Financial Conduct Authority (FCA) which this year similarly moved to provide a ‘safe space’ for innovators to try news ideas without the full burden of regulation stifling projects before they even got off the ground. (Link to: https://www.gamcrowd.com/news/article/fintech-review-the-fcas-regulatory-sandbox)

Jacqueline Loh, deputy managing director at MAS, said the new rules for the sandbox demonstrated the body’s commitment to “building a smart financial centre”. “The regulatory sandbox provides a conducive environment where regulatory requirements will be relaxed to enable firms to experiment with promising innovations within boundaries,” she added.

Elsewhere, analysis from CB Insights shows the deal count involving companies in the regtech space has already reached 78, the same amount of deals tracked in 2015. The analysts estimate the final deal total for the year will reach 90.

The term regtech is employed to describe companies that are focused on developing technologies that can help with compliance and risk management, with most working in the financial services arena.

Among the significant deals announced this year is identity-check and verification outfit Onfido’s $25m Series B investment round completed in April and led by VC firm Idinvest.

Onfido is building a machine-learning platform which offers an API to customers which can provide basic ID checks in seconds. The company has described its offering as a “trust engine” whereby the platform learns more about fraud patterns to identify quickly when anyone is attempting to hide their background.

Another deal tracked this year is the $1.6m invested in blockchain-based compliance service Chainalysis. The company says its products allow financial institutions to develop trust tools that respect user privacy and prevent abuse of our financial system.

The CB Insights analysis suggests up to $575m will have been invested into regtech enterprises in the past year.