SINGAPORE: Singapore unveiled a roadmap for strengthening its status as a financial hub in Asia, with the aim of growing the sector more than 4 percent a year and creating thousands of jobs.
“With technology transforming the way financial services are produced, delivered, and consumed, it is critical that Singapore’s financial sector also transforms, to stay relevant and competitive,” the Monetary Authority of Singapore said on Monday.
One focus is encouraging the adoption of technology to increase efficiency, the central bank said.
The MAS said it will take steps such as collaborating with financial institutions to create common utilities for services including electronic payments, as well as investing in research to develop solutions such as “distributed ledger technology” for inter-bank payments and trade finance.
The central bank will also expand cross-border cooperation agreements with other fintech centers to help grow Singapore as a base for foreign fintech start-ups, and will harness technology to simplify financial institutions’ regulatory compliance.
Chua Hak Bin, Maybank Kim Eng economist, said a challenge for Singapore is striking a balance between staying at the forefront of technology, and ensuring that technology is not too disruptive for the sector.
“Technology is blurring geography, and financial transactions can now be increasingly conducted with applications and the Internet via new financial entities,” he said.
“You want to encourage these things to take off and yet at the same time, you want to balance that risk… that some of this new technology could actually be disruptive to your major local players,” Chua said.
A need to regulate
Ong Ye Kung, education minister and an MAS board member, said encouraging innovation “does not mean the regulator takes a laissez-faire, hands-off approach.”
“New and emerging activities that pose systemic risk or endanger consumer interests will need to be regulated. At the same time, the landscape for existing regulated activities may have changed, necessitating a relook at rules,” he added.
Between 2016 and 2020, Singapore aims to average 4.3 percent annual growth in financial sector real value-added and annually create 3,000 net jobs in financial services and 1,000 net jobs in the fintech sector, the central bank said.
It said Singapore aims to be a leading international wealth management hub, as well as an Asian hub for fund management.
The MAS said it is working with the financial industry to develop Singapore as an Asian center for capital raising and enterprise financing, and as an infrastructure financing hub.
It also seeks to develop Singapore as a leading center for Asian fixed income, and a global capital for Asian insurance and risk transfer.