International Banking Facility

Here are the 5 key pillars of Singapore’s new financial services transformation plan

Improving payment connectivity, digitizing financial infrastructure and promoting green finance will be among the main areas of focus for Singapore’s central bank and financial regulator in the coming years.

These priorities were unveiled in the updated Financial Services Industry Transformation (ITM) 2025 Map, released by the Monetary Authority of Singapore (MAS) earlier this month.

The roadmap defines the main growth strategies for the sector for this year. It strives to grow Singapore’s financial sector at an average annual rate of 4-5% from 2021 to 2025, create more than 3,000 jobs on average each year, and enable the city-state to maintain its position as leading international financial center in Asia.

Singapore Financial Services Sector Transformation Map 2025

ITM 2025 includes five key growth strategies.

The first strategy focuses on digitizing Singapore’s financial infrastructure and promoting the development of digital platforms for increased efficiency in the issuance, listing and settlement of bonds, as well as the settlement of funds. A digital platform that connects small and medium-sized enterprises (SMEs) in growing regions, facilitates business discovery and enables easier access to trade finance for participating SMEs will also be launched.

The second strategy will focus on improving payment connectivity and creating an innovative digital asset ecosystem. This will be done by expanding cross-border payment links with regional economies and getting involved in initiatives such as Project Nexus, an effort led by the Bank for International Settlements (BIS) to connect instant payment systems.

MAS will also continue to explore opportunities related to distributed ledger technology (DLT), digital currencies, and asset tokenization for use cases such as cross-border payments, trade finance, and capital markets. Several initiatives, including Project Guardian and Project Orchid, have been launched over the past year to explore these technologies.

The third strategy will focus on catalyzing Asia’s transition to net zero, and will see MAS work with industry to develop solutions to scale up sustainable and transition finance.

Objectives will include greater clarity on transition activity through, for example, the development of an industry-led taxonomy, facilitating the decarbonization of real economy sectors with financing solutions for businesses, improving sustainability disclosures and creating data utilities with efforts like Project Greenprint, a set of initiatives to harness technology and data to enable green and sustainable finance.

To support these sustainable development initiatives, the MAS-administered Financial Sector Development Fund (FSDF) will set aside S$100 million over the next five years for capacity building, green fintech, climate risk and reinsurance, and new financing solutions.

The fourth strategy will focus on promoting a skilled and adaptable workforce. This will be done by working closely with the Institute of Banking and Finance (IBF), the financial sector and tripartite partners – the Ministry of Manpower, the National Trades Union Congress and the National Employers Federation of Singapore – to build skills in key growth areas such as sustainability and technology, and provide training support for Singaporean finance professionals at different stages of their careers.

An estimated S$400 million from the FSDF will be channeled to support the Talent and Leaders in Finance program from 2021 to 2025 to nurture more Singaporean finance specialists and leaders.

Finally, the fifth strategy will seek to help Singapore build on its asset class strengths and deepen its capabilities in areas such as foreign exchange (FX), insurance, wealth and asset management, private capital and fintech.

The financial sector grew by 5.7% per year between 2016 and 2020; More than 20,000 net jobs created

The updated roadmap builds on its previous version, launched in 2017, with a strong focus on innovation and technology adoption, as well as finance and technology workforce development.

The ITM 2016-2020 plan had a target of 3,000 net jobs created each year, but exceeded it with an average of 4,100 net jobs created per year. More than 20,000 net jobs were created in financial services over the period 2016-2020, said Lawrence Wong, Deputy Prime Minister and Minister of Finance, and Deputy Chairman of MAS, at the launch event of IMT 2025 on September 15. Singapore’s financial services sector grew by an average of 5.7% each year, beating the target of 4.3%.

Singapore, a major fintech hub in Southeast Asia with more than 1,000 companies, faces a severe talent shortage in the fintech sector.

Senior executives from recruitment agencies Michael Page Singapore, Robert Walters Singapore, JobTech and Randstad Singapore told Channel News Asia last year that tech talent in the financial sector is in such demand that many applicants receive multiple job offers. employment and are offered salary increases.

Before the pandemic, technology was already an area of ​​supply-demand mismatch, but COVID-19 has seen demand surge amid digital transformation projects and a booming fintech industry, Faiz said. Modak, Senior Director of Technology and Transformation at Robert Walters Singapore.

Daljit Sall, chief technology officer at Randstad Singapore, said the recruitment agency has seen an increase in demand for digital finance talent, including fintech services and platforms. He said the local tech talent pool was not big enough to meet new business demands, adding that the COVID-19 pandemic had made it difficult to find overseas talent.

Infographic of Singapore’s financial services industry transformation map in 2025:

Infographic MAS FS ITM 2025

Featured image credit: edited from Unsplash

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