Rise in funding for Singapore fintech firms developing AI solutions

Boost comes even as funding for sector here has been on downward trend since 2023

- Sheila Chiang

Investors are putting their money into fintech firms that integrate artificial intelligence (AI), even as funding for the sector fell to US$1.3 billion (S$1.74 billion) in 2024—its lowest level since 2020.

AI-powered fintech investments in Singapore jumped to US$160 million in the second half of 2024, from US$24 million in the first half, data from professional services firm KPMG on Feb 26 showed.

KPMG data also showed that Singapore's fintech funding has been on a downward trend since 2023, amid a global downturn in fintech investments as investors focus on companies with a clear and achievable path to profitability.

Mr Anton Ruddenklau, partner and global head of fintech at KPMG International, told The Straits Times that investors are funding companies developing AI-powered solutions in key financial functions such as credit risk assessment, cyber-fraud prevention and asset allocation.

The Singapore FinTech Association (SFA), which facilitates collaboration between market participants and stakeholders in the fintech ecosystem, said most fintech firms across various sectors integrate AI into their systems.

From transaction monitoring in regulatory tech to quantitative trading, which involves the use of computer algorithms and programs, and robo-advisory, AI powers key financial functions, said SFA.