Financial Services to Singapore

The Market

Financial Services

Financial services in Singapore comprises the banking sector, capital markets, wealth management and insurance. The country is also a regional Renminbi (RMB) gateway, with the appointment of an RMB clearing bank in 2013.

Singapore's central bank, the Monetary Authority of Singapore (MAS) helps shape the financial industry by promoting a strong corporate governance framework and close adherence to international accounting standards. It also works closely with other government agencies and financial institutions to develop and promote Singapore as a regional and international financial centre.

The range of financial services offered by the industry has evolved and expanded to include areas such as wealth and asset management, equity and bonds, foreign exchange and derivative markets. Today Singapore is one of the most established capital markets in the Asia-Pacific and notably, the Singapore Exchange (SGX) is the preferred listing location of close to 800 companies.

The market is well-regarded as a triple-A rated economy with strong growth potential, a sound and stable location for business expansion as well as for investments. It is home to over 200 banks, and with a total asset size of almost US$2 trillion as of December 2013 the banking sector is critical to Singapore’s role in financing local and regional growth (Source: Monetary Authority of Singapore, Asian Dollar Market – Accessed 1 December 2017 ). Activities in this sector include trade facilitation, corporate finance and building of infrastructure. Singapore’s deep and liquid capital markets are also a key source of funding and as a facilitator of growth and development in Asia Pacific.

Singapore is well recognised as one of the premier asset management centres in Asia. Besides global and locally-owned asset managers in the traditional space, there is a growing community of alternative players, including hedge fund, private equity and real estate managers (Source: Monetary Authority of Singapore, Wealth Management and Insurance ).

Fintech

Fintech firms are shaking up the traditional banking and financial services industry. In Singapore, fintech start-ups are being courted aggressively to bring their innovation to local banks.

With Singapore’s move towards becoming a Smart Nation and a global fintech hub, the country has become an increasingly attractive destination as a “preferred gateway” into Asia for fintech startups. Singapore’s vibrant startup ecosystem, supportive government, stable financial system and business-friendly tax regime, have helped turn the country into an attractive spot for fintech entrepreneurs.

Singapore has made fintech a high priority as it intends to keep its leading position as a global financial center. To this end, MAS have deployed a number of initiatives aimed at boosting fintech innovation, and helping startups collaborate with banks. It will be stepping up efforts to encourage financial institutions to enhance connectivity and fintech innovation through Application Programming Interfaces (APIs). There are also plans to work with industry to transform the insurance marketplace through centralised blockchain platforms that will allow for more efficient risk placements, and create specialist insurance solutions to address emerging risks in the region.

Opportunities

Financial Services

As an international financial centre, Singapore offers financial institutions a pro-business environment that is cost-competitive, with an effective regulatory environment, strong infrastructure and a highly skilled and cosmopolitan pool of finance professionals.

A premier wealth management hub offering investors direct access to regional and global investment opportunities, its robust and transparent legal framework is coupled with economic and political stability and provides an ideal location for wealth managers to tap into asset gathering opportunities in the region.

There are opportunities for Australian firms to complement the vibrant insurance ecosystem of life and general insurers, reinsurers, intermediaries and ancillary service providers.

Singapore’s advanced infocomm infrastructure and strong connectivity affords service providers and investors greater access to a broader range of trading and information services in the region.

Another opportunity is the development of training programs to enhance the competencies of financial sector professionals and to strengthen the local talent pipeline of finance professionals and leaders.

FinTech

The recent rise of fintech in Singapore is due to a friendly regulatory environment which enables innovation to grow, and talent to come from all over Asia and also Australia to start up companies, along with an improving infrastructure and more entrepreneurial mind-set within banks when working with start-ups.

Notable initiatives in Singapore include the “regulatory sandbox”, which allows financial services ventures to experiment and test fintech solutions under less stringent laws; MAS’ Fintech and Innovation Group and Fintech Office; as well as a set of rulings aimed at easing the current requirements for financial intermediaries and fintechs.

Like Singapore, the Australian Government is committed to working with the fintech industry, regulators and other stakeholders, on key issues to underpin the continued innovation in financial services. There is strong support of the industry’s objective of making Australia the leading market for fintech innovation and investment in Asia by 2017. There is opportunity for both Singapore and Australia to collaborate in areas such as strategies to promote and support the evolution of fintech start‑ups and innovators to develop, test and globally launch their innovative financial products and services in the market that is most appropriate or specific to the fintech product or service at hand, e.g., a mobile payment system targetted at Asian retailers might best be designed or launched from Singapore, etc., and conversely, the same can be said of a product/service designed for the Australian market.

Competitive environment

The Singapore Government has, since 1999, removed the 40 per cent ceiling on foreign ownership of local banks. Approval, however, is required before an individual investor (and parties deemed to be acting in concert with him/her) may acquire the following levels of shareholdings in any bank incorporated in Singapore: 5 per cent, 12 per cent and 20 per cent. ( Source: The World Bank Group, Investing Across Borders. Singapore , 1 Dec 2017 ).

There is regional competition from key financial centres in Asia-Pacific particularly Australia, Hong Kong, Japan, all of which are registering strong growth in their financial markets.

Tariffs, regulations and customs

Financial institutions with substantive business plans to establish or expand their operations in Singapore may apply for MAS tax incentives or grant schemes under the Financial Sector Development Fund (FSDF). Successful applicants must satisfy rigorous requirements with respect to the scale and quality of activities to be conducted in Singapore.

Applicants can also avail themselves of the training grant schemes and scholarships available under the FSDF to deepen staff competencies and build specialist talent within their organisations. Some of the grant schemes available under the FSDF include the Financial Training Scheme, Institute of Banking and Finance Standards Training Scheme [formerly known as the Financial Industry Competency Standards Training Scheme] and Financial Scholarship Programme.

MAS is the integrated regulator and supervisor of financial institutions. MAS establishes rules for financial institutions which are implemented through legislation, regulations, directions and notices. Guidelines have also been formulated to encourage best practices among financial institutions.

Marketing your products and services

Market entry

MAS has incorporated all regulated activities in the securities and futures market into a single licensing regime under which individual market intermediaries are only required to hold a single licence to conduct a range of financial activities. Licensees wishing to expand into new activities can obtain MAS approval, subject to meeting the requisite criteria, without the need to obtain an additional licence. This aims to accommodate changes in the business strategies of individual industry participants and provide flexibility and ease of commencing new and innovative business in the industry. For more information about setting up in Singapore, visit Monetary Authority of Singapore.

Links and industry contacts

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Contact details

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