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Singapore as a leading international financial center in Asia: Financial Services Industry Transformation (ITM) Map 2025

In 2021, the finance and insurance sector employed around 225,200,000 people and accounted for around 14.6% of Singapore’s nominal gross national product (GDP). Although it is not a sector that employs the most people or contributes the most to GDP, the financial services sector is crucial to Singapore’s goal of becoming one of the main centers Asian financials.

According to the 32nd edition of the Global Financial Centers Index released on September 22, 2022, Singapore ranks first among financial centers in Asia, overtaking Hong Kong. However, Singapore cannot rest on its laurels but must constantly move forward. Thus, the Financial Services Industry Transformation (ITM) Map 2025 will define the growth strategies to further develop Singapore as a leading international financial center in Asia.

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The financial services sector is expected to grow by 4% to 5% per year between 2021 and 2025

The first Financial Services Industry Transformation (ITM) map was launched in 2017. From 2016 to 2020, the financial services industry grew by an average of 5.7% per year, exceeding the target of 4, 3% per year. The sector created an average of 4,100 net jobs each year, above the target of 3,000 net jobs per year, confirming the success of the first Financial Services ITM.

In the recently announced Financial Services Industry Transformation (ITM) Map 2025, Singapore aims to grow the industry by 4%-5% per year on average and create around 3,000-4,000 net jobs on average per year.

To help Singapore achieve these goals, the ITM will cover 5 key strategies: (1) building asset class strengths, (2) digitizing financial infrastructure, (3) catalyzing the transition to net zero in Asia, (4) shaping the future of financial networks and (5) fostering a skilled and adaptable workforce.

Improving asset class strengths

The Monetary Authority of Singapore (MAS) has identified key asset classes where Singapore already plays a key regional or global role and will enhance Singapore’s capabilities in these areas:

  • Foreign Exchange – Broaden and deepen the electronic currency (FX) trading ecosystem by anchoring more FX platforms and liquidity takers.
  • 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.
  • Wealth Management – Become the Asian hub of philanthropy by creating impact monitoring solutions, philanthropy advisory skills, and innovative philanthropy models.
  • Asset Management – Improve the open-ended company regime and other fund structures to meet broader industry needs.
  • Private capital markets – Develop private credit to complement private equity and venture capital.
  • FinTech – Anchoring promising FinTech start-ups in areas such as Web 3.0, artificial intelligence and green FinTech.

Companies already working in these areas can expect continued support and development. Additionally, innovative solutions that develop Singapore’s expertise in these areas will also receive support.

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Digitization of financial infrastructure

While our financial sector has been a strong adopter of technology, there are still areas where technology can unlock new economic value, improve financial access and inclusion for businesses and individuals.

As part of the Financial Services ITM, MAS aims to continue leveraging technology with industry partners to:

  • Develop digital infrastructure and platforms to improve efficiency (eg bonds, fund settlement) and access new markets (eg Business Without Borders).
  • Bond Market Infrastructure – Improve the end-to-end efficiency of primary bond issuance, listing and settlement processes, and strengthen Singapore’s proposition as the preferred bond issuance and listing venue.
  • Funds Settlement Utility – Develop an industry-leading fund settlement utility to centralize subscription, redemption, and recordkeeping workflows and facilitate reconciliation of fund data streams, reducing settlement time and improving efficiency.
  • SME Trade 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.
  • Enable new models of digital financeincluding issuing digital banking licenses to unlock new business models and markets

Digital solutions will continue to play an important role in financial environments and businesses that leverage technology will continue to thrive.

Harnessing finance to catalyze the Net-Zero transition in Asia

Just as money is a catalyst and a tool for individuals, finance can be a lever to catalyze Asia’s development and transition to net zero. MAS works with industry to develop innovative solutions to scale up sustainable and transition finance.

  • Provide greater clarity on transition activities including through the development of an industry-led taxonomy for eight priority sectors.
  • Facilitate the decarbonization of real economy sectors thanks to financing solutions adapted to businesses.
  • Improve sustainability information and create data utilitiessuch as Project GreenPrint, to facilitate corporate sustainability disclosures and investor access to corporate ESG data.
  • Provide a grant of S$100 million over the period 2021-2025 for Capacity Building, Green FinTech, Climate Risk and Reinsurance, and Sustainable and Transition Finance Solutions.

Although relatively new, ESG investing has been a major focus of the financial industry in recent years. This focus is set to continue as finance becomes a means to catalyze the region’s transition to net zero. Not only will new business solutions be needed to address sustainability challenges, but talent and expertise will also need to be developed to assess and scale up sustainable and transition finance.

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Shaping the future of financial networks

In recent years, the concept of digital assets has grown as new technologies such as cryptography, distributed ledger technology and tokenization of assets have changed our view of assets (beyond physical and real assets ). These have the potential to transform markets and financial services and make financial transactions smoother, cheaper and more efficient. MAS aims to improve payment connectivity and build an innovative and responsible digital asset ecosystem by:

  • Develop cross-border payment links with regional economies (e.g. Real-Time Payments Links, Project Nexus – a blueprint that outlines how countries can fully integrate their retail payment systems onto a single cross-border network)
  • Explore the potential of distributed ledger technology in promising use cases (e.g. cross-border payments, trade finance, and capital markets)
  • Support the tokenization of financial assets and the real economy (e.g. Project Guardian – a collaborative initiative with the financial services industry that seeks to explore the economic potential and value-added use cases of asset tokenization)
  • Enable digital currency connectivity (e.g. Project Orchid which aims to create the technology infrastructure and capabilities to issue a digital Singapore dollar, should MAS decide to do so in the future)

While cryptocurrencies and digital token payments are still nascent (and volatile), not being part of the technological changes would be counterproductive for Singapore. Instead, the various pilot projects of MAS in collaboration with industry players will test the feasibility of applying these technologies while controlling the risks. By being an early adopter, Singapore has a chance to shape the future of financial networks.

Foster a skilled and adaptable workforce

To realize the sector’s potential, a skilled and adaptable workforce (complemented by high-quality global talent) is essential to seize growth opportunities and drive transformation. 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 S$400 million grant to the Talent and Leaders in Finance program from 2021 to 2025 to enable industry professionals to get good jobs and advance in their careers.

  • Strengthen the skills of the workforce in growth areas and provide training support for finance professionals at different stages of their careers.
  • Develop specialized talents in areas such as sustainability and technology.
  • Develop leaders through opportunities to gain expertise, international exposure and networks to help them succeed in their leadership roles.

This is not only good news for companies that will need these talents to meet industry challenges and drive innovation, but also for individuals. New entrants to the industry as well as seasoned employees will have the opportunity to develop into new areas of growth within the industry.

Some of the skills development programs available include: Financial Specialist Fellowship, IBF Standards Training Program, Technology Immersion Program for Finance, and Career Transition Program

Read also : Here’s how companies in Singapore can leverage the Professional Conversion Program (PCP) to reskill your employees

The financial services industry is a growing sector

The financial services sector is a growth engine for Singapore’s economy and this has been reflected not only in the labor market reports which show an increase in hiring, but also in the transformation map of the sector. . Financial Services Industry Transformation Map 2025 sets the near-term direction MAS has set for developing and sustaining Singapore’s advantage in financial services.

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