As companies around the world strive to navigate volatile macroeconomic and geopolitical conditions, Singapore’s financial sector finds itself in an advantageous situation. Many of its firms have already started investing in digitisation, efficiency and productivity to better prepare for unforeseen crises. Not only has this strengthened the ability of Singapore’s financial industry to serve the local economy, but it also empowers the country to play a greater role in Asia’s development and connecting global markets.
To accelerate this progress and tap into emerging trends in an increasingly complex world, the Monetary Authority of Singapore (MAS) has set out bold, clear guidance that will ensure Singapore’s financial sector continues to flourish, with positive ripple effects for Asia and the world.
The Financial Services Industry Transformation Map (ITM) charted by the MAS provides specific targets for the five years to 2025, including for the sector to grow by an average of 4-5% a year and create 3,000-4,000 jobs1 per annum. While these are ambitious, Singapore’s financial services industry has already demonstrated its strength by convincingly exceeding the targets under the previous plan.2
Indeed, the ITM’s emphasis on climate action, trade finance, digital connectivity and workforce reskilling reflects many of the strategies already being adopted by many financial firms, including Standard Chartered, to address today’s challenges.
The implications go beyond just the financial industry, and include improving prospects for the workforce and financial inclusion. More than 20,000 net jobs were created under the previous ITM and nearly 90,000 professionals across a broad range of industrial sectors were trained or reskilled.3 Digitisation, meanwhile, can lead to benefits such as wider access to financial products4 – especially vital in an inflationary environment.
From climate change to trade finance, cooperation is key to success
For the financial sector to maximise the benefits of the ITM, cooperation is critical. One such area is climate action. This is reflected in the new ITM, which gives sustainability greater prominence. Research and sponsorship from an engaged government, combined with the rise in net-zero initiatives across the financial sector, will go far in developing Singapore’s sustainability credentials.
Establishing what net zero means to them and their clients will help financial firms determine what capabilities and people to invest in, and how best to collaborate with other industry players. The increased client adoption of financial products such as sustainability-focused loans and bank accounts; and the growing interest in platforms such as Climate Impact X, a global voluntary carbon credit exchange we co-founded, serve as proof that there is collective effort to tackle climate change.
Another area where cooperation is vital is trade finance. Singapore is ideally placed as a global hub for trade, and Standard Chartered’s founding membership in trade data infrastructure platform SGTraDex, a public-private partnership initiative, demonstrates our commitment to building transparent and trusted trading and financial networks.5 In partnership with Trafigura and Advario, we recently completed our first live electronic oil inventory financing via SGTraDex.6
With its well-developed digital and physical infrastructure and a stable socio-economic environment, Singapore also stands out as a regional treasury centre (RTC) of choice for global businesses. The city-state’s willingness to embrace smart technologies adds punch to its already-attractive cash and liquidity management landscape. And Standard Chartered continues to be one of the preferred banks for RTCs in Singapore.
Powering Singapore with the right technology and skills
Standard Chartered’s own assessment of customer needs led to the launch in September of Trust Bank, a digital bank partnership with FairPrice Group aimed at serving a broader market segment and supporting financial inclusion with cost-effective and innovative products and rewards through a strong ecosystem. More than 200,000 accounts were opened in the first month, reflecting Singaporeans’ healthy demand for digital banking services.
To serve institutional investors’ demand for exposure to digital assets, the Bank’s innovation arm SC Ventures has various partnerships, including Zodia Custody. The digital assets custodian enables institutional owners and managers to invest in a range of cryptocurrencies without compromising on asset safekeeping. In Singapore, the Bank is also looking into tokenising trade finance assets to allow for more transparent, secure and inclusive real economy flows. These solutions can support ITM’s other focus of enhancing payments connectivity and building an innovative and responsible digital asset ecosystem.
To do all that, a future-fit workforce that is customer-centric is key. It will require a targeted talent strategy that includes an openness to hiring from other industries, such as computer engineering, which are increasingly relevant in a digitising financial sector. Government support is also available with training programmes under the ITM.
As a long-term supporter of the government’s reskilling and upskilling goals, we have embarked on various workforce transformation programmes via internal initiatives such as SkillsFuture@SC and ‘diSCover’ education platform since 2017. Being the first financial institution to offer the Career Conversion Programme and among participating employers of the Work-Study Degree Programme, we are leading the charge to ensure Singapore’s workforce is dynamic and adaptable.
Mapped out by the ITM, the shared goal for a comprehensive and bold transformation will serve as a much-needed compass as Singapore’s financial sector navigates and thrives through a more complex global geopolitical environment. As a leading force in global finance, Singapore will continue to contribute to a prosperous Asia and serve as a pillar for the world economy.
More than ever, a long-term mindset and commitment to collaboration across the industry will be critical to success. Leaning into this strength, Singapore can no doubt become one of the world’s foremost financial hubs.
The writer is Cluster CEO, Singapore and ASEAN Markets (Malaysia, Vietnam, Thailand and Representative Offices).
3 Financial Services ITM media briefing slides, 15 Sep 2022.