The Monetary Authority of Singapore (MAS) yesterday launched the Financial Services Industry Transformation (ITM) Map 2025, outlining the growth strategies to be pursued to further develop Singapore as a leading international financial center in Asia – to connect global markets, support Asia’s development, and serve Singapore’s economy.
For the insurance industry, ITM2025 aims to promote insurance risk advice and alternative risk transfer solutions, facilitate risk financing and address pandemic, climate and cyber risks.
The IMT, launched by Mr. Lawrence Wong, Deputy Prime Minister and Minister of Finance, and Deputy Chairman of MAS, includes five key strategies:
a. Improve the strengths of the asset class;
b. Digitize the Financial Infrastructure;
vs. Catalyze the Net-Zero transition in Asia;
D. Shaping the future of financial networks; and
e. Promote a skilled and adaptable workforce.
Improving asset class strengths
MAS will work with the financial industry to deepen its capabilities in asset classes where Singapore plays a key regional or global role.
a. Exchange – Broaden and deepen the electronic currency (FX) trading ecosystem by anchoring more FX platforms and liquidity takers.
b. Insurance – Catalyze insurance risk advisory and alternative risk transfer solutions for Asia, to address pandemic, climate and cyber risks, and facilitate capital market participation in risk financing.
vs. Wealth management – Become the Asian center for philanthropy by creating impact monitoring solutions, philanthropy advisory skills and innovative philanthropy models.
D. Asset Management – Improve the regime for open-end companies and other fund structures to meet the broader needs of the industry.
e. Private capital markets – Develop private credit to complement private equity and venture capital.
f. FinTech – Anchoring promising FinTech start-ups in areas such as Web 3.0, artificial intelligence and green FinTech.
Digitize financial infrastructure
The MAS will promote the development of digital infrastructures and platforms.
a. Bond market infrastructure – Improve end-to-end efficiency in primary bond issuance, listing and settlement processes, and strengthen Singapore’s proposition as the bond issuance and listing venue of choice.
b. Funds settlement utility – Develop an industry-leading fund settlement utility to centralize subscription, redemption and record-keeping workflows and facilitate reconciliation of fund data streams, reducing settlement time and improving efficiency.
vs. SME Business Discovery Platform (Business-sans-Borders) – Launch a digital platform to connect small and medium-sized enterprises (SMEs) in growing regions. This facilitates business discovery and allows easier access to trade finance for participating SMEs.
Catalyzing the Net-Zero Transition in Asia
To catalyze Asia’s transition to net zero, MAS is working with industry to develop innovative solutions to scale up sustainable and transition finance.
a. Provide greater clarity on transition activities including through the development of an industry-led taxonomy for eight priority sectors.
b. Facilitate the decarbonization of real economy sectors thanks to financing solutions adapted to businesses.
vs. Improve sustainability information and create data utilitiessuch as Project GreenPrint, to facilitate corporate sustainability disclosures and investor access to corporate ESG data.
D. Provide a grant of S$100 million ($71 million) from 2021 to 2025 for Capacity Building, Green FinTech, Climate Risk and Reinsurance, and Sustainable and Transition Finance Solutions.
Shaping the future of financial networks
MAS aims to improve payment connectivity and create an innovative and responsible digital asset ecosystem.
a. Develop cross-border payment links with regional economies (e.g. real-time payment links, Nexus project).
b. Explore the potential of distributed ledger technology in promising use cases (e.g. cross-border payments, trade finance and capital markets).
vs. Support the tokenization of financial assets and the real economy (e.g. Project Guardian).
D. Enable Digital Currency Connectivity (eg Project Orchid).
Foster a skilled and adaptable workforce
MAS and the Institute of Banking & Finance (IBF) will work closely with the financial industry and tripartite partners to foster a strong workforce.
The Financial Sector Development Fund will provide a grant of S$400 million to the Talents and leaders in finance program over the period 2021-2025 to enable professionals in the sector to hold good jobs and progress in their careers.
a. Strengthen the skills of the workforce in growth areas and provide training support for finance professionals at different stages of their careers.
b. Develop specialized talents in areas such as sustainability and technology.
vs. Develop leaders through opportunities to gain expertise, international exposure and networks to help them succeed in their leadership roles.
The MAS projects that the financial sector will grow on average by 4% to 5% per year between 2021 and 2025 and will create 3,000 to 4,000 net jobs on average each year.
In comparison, under ITM2020, the financial services sector grew by an average of 5.7% per year, exceeding the target of 4.3% per year from 2016 to 2020. Over 20,000 net jobs were created in financial services over the five-year period, an average of 4,100 net jobs each year, above the target of 3,000 net jobs per year.
The Financial Services ITM series was launched in 2017 with a strong focus on innovation and technology adoption and the development of a world-class workforce.