Singapore’s fintech sector is undergoing a strategic shift, with investment totalling US$1.3 billion in 2024, the lowest level since 2020, according to a recent report.

This move reflects the global recalibration towards a more sustainable growth model, even as key areas like artificial intelligence ( AI )-powered fintech and blockchain solutions gain traction, finds KPMG’s Pulse of Fintech H2 2024 report.

Despite a more cautious investment climate, fintech deal values surged 41% in H2 2024 to US$781 million, signalling a shift toward high-value, early-stage investments. AI-powered fintech saw a particularly strong rebound, with funding climbing sharply from US$24 million in H1 2024 to US$160 million in H2 2024.

Regulatory technology ( regtech ) and business automation solutions drove much of this growth, as financial institutions strive for AI-powered compliance tools amid an increasingly complex regulatory environment.

Blockchain and crypto investments also showed resilience, the report reveals, rising 22% in H2 2024 to US$267 million, fuelled by AI-integrated digital asset solutions and a growing institutional adoption of blockchain-based financial infrastructure.

“AI could be a sleeping giant for fintech investment,” says Anton Ruddenklau, KPMG’s global innovation and fintech lead. “While we are still in the early stages, AI-focused regtech firms will likely see the most traction in the coming year.”

While Singapore’s payments sector remains the third-largest fintech vertical, the KPMG report points out, the sector faces growing challenges in a maturing market. H2 2024 saw an increase in deal count, with nine transactions totalling US$57.4 million, but future growth will likely come from cross-border and regional expansion rather than domestic innovation.

As fintech investment recalibrates, some investors are adopting a wait-and-see approach in light of the evolving regulatory landscape, according to the report, but it adds that Singapore’s focus on sustainable innovation will ensure it remains a leading international fintech hub.

Globally, fintech investment fell to a seven-year low of US$95.6 billion, the Americas attracted US$63.8 billion in fintech investment across 2,267 deals in 2024, of which the US accounted for US$50.7 billion across 1,836 deals while the Europe, Middle East and Africa region attracted US$20.3 billion across 1,4645 deals.

The Asia-Pacific region, meanwhile, hit its lowest funding levels since 2014. India led the region with US$4.1 billion in fintech investment, while China’s funding collapsed from US$2.6 billion in 2023 to just US$687 million in 2024. Australia, in contrast, saw a near doubling of fintech investment to US$2.1 billion.

Despite the slowdown, 2025, according to KPMG, is expected to bring renewed positivity, with AI, blockchain and digital payments key priorities, and with regtech and cybersecurity solutions poised for significant growth.