During the first half of 2024, fintech investors remained very cautious, pulling back from making large deals except in exceptional circumstances. With macroeconomic conditions expected to remain challenging well into H2’24, and a US presidential election approaching, fintech investment is expected to remain subdued heading into H2’24.
Here are the top fintech trends for H2’24:
- AI will continue to gather steam among fintech investors: Similar to the investment environment more broadly, interest in AI will likely overshadow every other area in terms of investor interest and investment.
- The payments space will continue to attract the lion’s share of investment: Payments will continue to account for the largest deals in the payments space, with a continued focus on the modernization of B2B payments, embedded payments, and real-time payments.
- Regtech will attract additional attention and investment: Regtech will attract increasing interest and investment—driven by the constant evolution of regulatory regimes and the growing complexity of reporting requirements.
- DORA will keep investors focused on cybersecurity: Cybersecurity will remain a key focus for fintech investors, particularly given the EU’s Digital Operations and Resilience Act will come into force early in 2025; AI-related cybersecurity solutions will garner the most interest and investment.
- Increasing convergence between trad-fi and de-fi: Jurisdictions will continue to explore and approve activities that blend traditional finance with decentralized finance, including areas the tokenization of real work assets and the use of traditional financial infrastructure to support crypto investment.
The fintech landscape in Singapore
Singapore’s fintech ecosystem recalibrated in 2024, attracting US$1.3 billion in investments. This marks the lowest level since 2020, reflecting a broader trend in global fintech funding, which dropped to a seven-year low of US$95.6 billion. Despite reduced funding levels, Singapore's focus on innovation and sustainability positions it as a leader in AI and blockchain advancements.
Cryptocurrency & blockchain gain momentum with AI integration
The second half of 2024 saw Singapore’s crypto and blockchain investments surge by 22%, reaching US$267 million. This growth was propelled by the increasing integration of AI into digital asset solutions, enhancing blockchain efficiency, security, and compliance capabilities. Regulatory stability and strong institutional interest further cemented Singapore’s role as a key player in the digital asset space, with standout deals such as Partior’s US$80 million raise for its blockchain-based interbank settlement network—the largest in the Asia-Pacific region.
AI-powered fintech surges as regtech and automation gain traction
The AI fintech segment experienced remarkable momentum in H2’24, with investments soaring from US$24 million in H1’24 to US$160 million in H2’24—a more than sixfold increase. This rapid growth was driven by heightened demand for regtech, business automation, and agentic AI solutions, as financial institutions sought to streamline compliance and operational processes amid increasing regulatory complexities. Investors are showing a growing appetite for AI-driven financial services, reflecting the sector’s potential to transform fintech operations through scalable and intelligent automation.
A strong foundation for 2025: AI, blockchain, and digital payments in focus
Looking ahead, Singapore’s commitment to fostering innovation in fintech remains steadfast. With declining interest rates and reduced global election uncertainties, 2025 is poised to see increased fintech deal activity. AI, blockchain, and digital payments are expected to remain at the forefront, especially with the Singapore Budget 2025 introducing new initiatives to accelerate AI adoption at scale. This strategic direction reinforces Singapore’s position as a fintech hub, driving sustainable growth and technological advancement in the region.
For more Singapore, regional and global insights, download the full report.
If what we’ve seen in the broader investment space is any indication, AI could be a sleeping giant for fintech investment. However, right now, it’s still very early days. There’s definitely a lot of interest in AI, generative AI, agentic AI and automation, but there’s a lot of caution too. Over the next year, AI-focused regtechs will likely see the most traction among investors as financial services companies look for better ways to respond to the increasingly complex regulatory environment.
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