With dedicated tracks for quantum, AI, ESG, and regional nexus, the scheme strengthens Singapore's fintech hub status.

The Monetary Authority of Singapore's Financial Sector Technology and Innovation Scheme (FSTI 3.0), with a total commitment of up to S$250 million, is the primary policy driver behind Singapore's fintech growth, providing targeted funding for cutting-edge technologies and regional collaboration. Since its inception in 2015, the FSTI programme has awarded S$340 million from the Financial Sector Development Fund (FSDF) to drive the adoption of technology and innovation in the financial sector. FSTI 3.0 was announced in 2022 by then Deputy Prime Minister and Minister for Finance, Mr Lawrence Wong, at the Singapore FinTech Festival, with an initial commitment of up to S$150 million over three years. In July 2024, MAS committed an additional S$100 million specifically for quantum and artificial intelligence capabilities, bringing the total committed under FSTI 3.0 to up to S$250 million, running until March 2026.

Commitment (S$ million) (S$ million)Source: Orionmano Industries

FSTI 3.0: A Renewed Commitment to Fintech Innovation

The FSTI programme, introduced by MAS in June 2015, has evolved through three iterations. FSTI 1.0 and 2.0 collectively awarded S$340 million from the FSDF, helping to strengthen the digital capabilities of financial institutions that served them and their customers through the COVID-19 pandemic, according to MAS Managing Director Ravi Menon. Transformative technology projects piloted with industry during these phases include SGFinDex, Project Orchid's Purpose Bound Money, Project Veritas' Responsible AI, green and sustainable finance through Project Greenprint, and large payment initiatives such as the cross-border payment linkage with Thailand.

FSTI 3.0 seeks to accelerate and strengthen innovation by supporting projects that involve the use of cutting-edge technologies or with a regional nexus, while doubling down on MAS' commitment to promote a vibrant technology ecosystem for the financial sector. The scheme builds on Singapore's open regulatory sandbox approach, which relaxes regulatory requirements to enable live experiments of innovation, and digital payment infrastructure including SGQR, FAST, and PayNow.

Six Tracks Targeting Emerging Technologies

FSTI 3.0 comprises six dedicated tracks: Centre of Excellence (CoE), Industry-Wide Projects, Innovation Acceleration, AIDA (AI & Data), RegTech, and ESG FinTech. Each track addresses specific technology domains and industry priorities.

The Enhanced Centre of Excellence track supports financial institutions in establishing innovation centres in Singapore, including corporate venture capital support for startups. The Industry-Wide Projects track funds collaborative initiatives that address shared industry challenges, while the Innovation Acceleration track covers Web 3.0, digital assets, and other emerging technologies.

A total of S$60 million is earmarked specifically for quantum computing innovation in financial services. This dedicated quantum track supports projects in cybersecurity, post-quantum cryptography pilots, and the development of quantum-ready financial infrastructure. Through the security grant component, MAS provides funding support of up to 30% to enable experimentation and development of quantum technology-related pilots to safeguard firms' critical data.

The enhanced AI and data grant under FSTI 3.0 helps financial institutions establish AI innovation centres in Singapore for a range of functions, including AI model building and training, deployment of AI models for high-impact use cases, governance and risk management, as well as testing and monitoring. MAS has noted that with the advent of Generative AI, financial institutions have embarked on initiatives to map the technology's opportunities and risks, and have begun piloting it across a range of use cases, though AI-readiness and adoption varies across institutions.

The ESG FinTech track supports sustainable finance solutions and ESG data analytics, while the RegTech track assists both advanced firms and less digitally mature firms looking to acquire regulatory technology solutions. Across all tracks, applicants are required to devote resources to talent development to strengthen the Singaporean FinTech talent pool.

Impact on Fintech Ecosystem and Regional Nexus

Eligible applicants under FSTI 3.0 include financial institutions, fintech companies, global technology firms establishing presence in Singapore, and research institutions with a financial sector focus. To qualify for funding, projects must involve cutting-edge technologies or demonstrate a regional nexus, and must show potential for significant industry impact and scalability.

The scheme provides funding support of up to 50% co-funding on manpower expenses for qualifying Singapore Citizens and up to 25% for non-Singapore Citizens (including Permanent Residents), for up to 24 months. Potential qualifying expenses also include professional services, hardware or software infrastructure and licences, equipment, and intellectual property rights.

MAS has piloted large payment initiatives such as the cross-border payment linkage with Thailand, demonstrating the regional focus that underpins FSTI 3.0. This regional nexus criterion ensures that funded projects contribute to Singapore's role as a financial hub connecting Southeast Asian markets. Project Nexus, the real-time payment corridor initiative, complements FSTI 3.0 by enhancing cross-border payment infrastructure across participating jurisdictions.

The continued infusion of FSTI 3.0 funds, coupled with Singapore's open regulatory sandbox and digital infrastructure, positions the city-state to sustain its fintech leadership through 2030. By targeting quantum computing, AI, ESG fintech, and regional collaboration, MAS is laying the groundwork for the next generation of financial services innovation while ensuring that Singapore remains a competitive and forward-looking international financial centre.