FinTechStartupComparative Study of FinTech Regulation: India, UK, and Singapore

INTRODUCTION

The emergence of financial technology, or FinTech, has transformed the distribution and consumption of financial services around the world. Through the use of innovations including artificial intelligence, blockchain, digital identity, and open banking, FinTech companies have disrupted historical bank models, providing quicker, less expensive, and more convenient solutions. But this disruption has also led to a need for regulatory bodies to face new risks associated with consumer protection, data security, systemic stability, and financial integrity. Various jurisdictions have dealt with these issues in various regulatory ways. This blog provides a comparative study of India, the United Kingdom, and Singapore’s FinTech regulatory regimes, ease of doing FinTech business, institutional support, and effects on startups, three jurisdictions that have become important FinTech hubs in Asia and Europe respectively.

OVERVIEW OF FINTECH ECOSYSTEMS

India’s FinTech industry has seen exponential growth with the support of a huge digitally enabled population, deep penetration of smartphones, and strong government-supported digital infrastructure. India boasts more than 10,000 FinTech startups as of 2024 and stands third worldwide in terms of FinTech adoption. Dominant segments are digital payments, digital lending, Insurtech, and wealth tech. The Indian FinTech industry is expected to become a USD 1.5 trillion market size by 2030 with a cumulative funding received of more than USD 30 billion (2014-2023).

The United Kingdom, and especially London, has traditionally been a FinTech hub in Europe. Post-Brexit, the UK retains leadership in global financial services innovation driven by forward-looking regulation, robust institutional backing, and international investor trust. The UK FinTech industry generated USD13.7 billion for the economy in 2023 and employs over 80,000 people. Key verticals are open banking, regtech, cryptocurrency, and cross-border remittances.

Singapore has placed itself strategically as a top FinTech centre in Southeast Asia, supported by forward-thinking regulatory policies, tax relief, and public-private partnerships. To date in 2024, Singapore is home to over 1,400 FinTech companies and has drawn in over 50% of total investment in the south east as a whole in the previous five years. Singapore is internationally known for its digital banking innovation, real-time payment, central bank digital currencies, and embedded finance.

REGULATORY FRAMEWORKS AND INSTITUTIONAL LANDSCAPE

India’s FinTech regulatory ecosystem is patchy but developing. The Reserve Bank of India (hereinafter referred to as “RBI”) is the primary regulator of digital payments, prepaid instruments, and digital lending institutions. Other regulators like the Securities and Exchange Board of India (hereinafter referred to as “SEBI”), the Insurance Regulatory and Development Authority of India (hereinafter referred to as “IRDAI”), and the Ministry of Electronics and Information Technology (MeitY) regulate respective FinTech subsectors. Even though there is no one FinTech law, sectoral rules apply to entities based on their activity, e.g., NBFC registration for digital lenders or PPI licensing for wallets.

The UK provides a relatively centralised regulatory framework in the form of the Financial Conduct Authority (hereinafter referred to as “FCA”), which oversees most FinTech activities such as payments, lending, investment advice, and cryptocurrency trading. FCA’s accommodating licensing and innovation-oriented strategy has been instrumental in FinTech proliferation. Launching the “Regulatory Sandbox” in 2016 enabled startups to experiment with innovative products in a sandboxed environment. More than 700 companies have taken part, with several going on to launch full market.

Singapore’s Monetary Authority of Singapore (hereinafter referred to as “MAS”) serves as the single regulator of the country’s complete financial system. The MAS has crafted an overarching framework for FinTech startups to be licensed under the Payment Services Act, 2019. The regime supports modular licensing, where startups are able to apply for various classes of licenses based on risk profile and service offering. MAS Regulatory Sandbox and Sandbox Express programs have also reduced barriers to entry for innovation, with companies able to pilot solutions in 21 days from the date of application within specific categories.

EASE OF STARTING AND SCALING A FINTECH STARTUP

With regard to initiating a FinTech business, Singapore has the most efficient regulatory procedure. The Payment Services Act provides a single window of application, ease of compliance, and a quick turnaround. MAS also provides grants, tax relief, and co-investment initiatives via the FinTech and Innovation Group. Singapore was ranked 2nd in the world for starting a business in the World Bank’s Doing Business Report (pre-COVID).

The UK is still a very favourable jurisdiction due to the FCA’s pro-innovation approach, regulatory transparency, and institutional backing in the form of Innovate Finance and the Department for Business and Trade. Startups are supported by transparent authorisation categories, continuous regulatory engagement, and access to the FCA sandbox. Post-Brexit regulatory divergence and licensing intricacies for pass porting services in the EU are still a limitation for cross-border scalability.

India is a huge opportunity because of its market size and digital architecture (e.g., Aadhaar, UPI, Account Aggregator), but regulatory complexity and compliance expenses can be a drawback. FinTechs have to deal with multiple regulators in many cases, with overlapping conditions and unclear-cut licensing processes. For example, RBI Digital Lending Guidelines of 2022 brought in stringent norms for digital lending, which, though essential to curb malpractices, increased operational costs for startups. However, efforts such as RBI, SEBI, and IRDAI regulatory sandboxes and the GIFT City’s International FinTech Hub are designed to promote innovation.

COMPARATIVE ANALYSIS OF KEY REGULATORY INNOVATIONS

Every jurisdiction has shown distinctive regulatory innovation. The UK was the first to adopt open banking regulation under the EU’s PSD2 directive, requiring banks to share consumer data with authorized third-party providers using secure APIs. This has driven competition and the development of new financial aggregators and payment platforms. Singapore responded by establishing APIX, a shared FinTech and bank platform, and supporting consent-based data sharing models.

India’s Account Aggregator Framework is a home-grown consent-based model of financial data portability. Since 2021, it has enabled users to share their financial data with FinTechs securely through RBI-regulated intermediaries. Although the system is promising, the adoption is limited owing to ecosystem maturity and awareness issues.

With regard to crypto currency regulation, Singapore has led the way in the licensing of virtual asset service providers under the Payment Services Act with the proviso of AML/CFT adherence. The UK has followed with Financial Services and Markets Act, 2023, regulation, subjecting crypto exchanges to FCA supervision. India has been non-committal, with the RBI frowning on crypto while the government imposed a 30% tax on crypto profits, classifying it as speculative income, without legislative recognition.

On consumer protection and data privacy, the UK implements robust safeguards through the UK GDPR and the Data Protection Act, 2018. Singapore enforces the Personal Data Protection Act (hereinafter referred to as “PDPA”), and MAS Guidelines on Cyber Hygiene. India’s regulatory framework is still in transition. The Digital Personal Data Protection Act, 2023 seeks to bring parity, but sector-specific norms such as RBI’s cybersecurity framework or MeitY’s data localisation guidelines continue to operate independently.

INSTITUTIONAL SUPPORT AND GLOBAL LINKAGES

All three jurisdictions possess global mindsets and promote international cooperation. Singapore has entered into several FinTech cooperation arrangements, such as with the UK and India, to enable regulatory harmonisation and collaborative innovation. The UK’s Global Financial Innovation Network enables cross-border sandboxing with more than 50 regulators worldwide. India is gradually increasing its international FinTech outreach, especially during its G20 presidency, and is likely to use GIFT City as a global financial services hub.

AMLEGALS REMARKS

The comparative study identifies that although each jurisdiction has adapted its regulations related to FinTech to fit its legal, institutional, as well as economic environment, there are trends that are evident across the board. These trends are the increasing use of regulatory sandboxes, focus on data-driven ecosystems, and consumer protection via privacy legislation as well as secure digital identity platforms.

Singapore stands out as a regulatory champion based on its consolidated regulation, modular licensing, and favorable policy environment, all of which lower barriers to entry and drive scalability. The UK continues to encourage FinTech dominance through regulatory transparency, early embrace of innovation instruments such as open banking, and international networking platforms. India, although layered in its regulations, is fast catching up with local innovation, huge digital adoption, and forward-looking tools such as Account Aggregators and the Unified Payments Interface.

For FinTech firms, ease of doing business is more often defined by institutional efficiency rather than formal regulation, interpretive consistency, and access to regulatory advice. Clear and responsive regulatory infrastructure, as in Singapore and the UK, strongly minimizes compliance friction and encourages innovation. India’s FinTech destiny will be determined by having more regulatory coherence and offering more integrated support mechanisms for startups crossing multiple domains.

Finally, as FinTech transforms financial systems around the world, legal systems will have to keep pace with flexible, principle-based, and technology-neutral architectures. Cross-border coordination, harmonized standards, and open innovation continue to be essential to realizing the full potential of financial technology.

– Team AMLEGALS assisted by Mr. Abhijeet Patra (Intern)