Overview of Financial Services Sector in Singapore

Nora Setiawan

October 31, 2020


Overview of Financial Services Sector in Singapore

Nora Setiawan

October 31, 2020

It has been over 50 years since its independence, Singapore has established itself as a leading global financial services centre. According to the Global Financial Centres Index (GFCI), Singapore was ranked the third most competitive financial centre in the world. 

Not only that, Singapore has edged out Hong Kong as Asia’s top financial services center. According to Business Insider, Singapore is set to outperform Hong Kong significantly, and also the gap between both countries’ rankings could widen further.

In 2018, Singapore’s financial sector grew 6.1% but it was somehow expected to slow in 2019. Managing director of the Monetary Authority of Singapore (MAS), Ravi Menon cited that insurance, payment services, and fintech-related activities were expected to thrive in the coming year, but for the financial intermediation were also mixed due to the slowing Chinese economy weighing down the credit demand, and it made the asset management was falling.

This year, the COVID-19 pandemic hit around the world and has caused severe disruption to global economic activities. Also, it has led to both demand and supply-side shocks to the Singapore economy. The impact of COVID-19 on the Singapore economy has been broad and significant, affecting different sectors of the economy, including the financial services sectors.

However, this article focuses on the financial services sectors in Singapore in the midst of the pandemic, the challenge, and the opportunity that the country can take. Let’s check it out!

The Financial Services Sector in the Midst of COVID-19

As we all knew, COVID-19 has taken the world into a state of emergency, including Singapore. The economy is losing the balance, companies are seeing a severe drop, and the stock market has also gone mad due to the pandemic. 

The government has already reacted and put together comprehensive rescue packages that will help the businesses that urgently need them. The Ministry of Trade and Industry (MTI) is tapping on high-frequency and real-time indicators, in addition to traditional indications, and they have to monitor the latest economic developments and assess the impact of COVID-19 on the Singapore economy, especially on the financial services sector.

Based on the latest report, Ravi Menon, Managing Director of the Monetary Authority of Singapore had announced that Singapore’s financial sector is agile and resilient amid the COVID-19.

The financial services sector grew by 5% in the first six months of this year, and that created a silver lining amid gloomy economic predictions due to the pandemic. The growth has outpaced the same period last year, according to estimates by the MAS.

The growth in the first half of this year was driven by offshore bank lending, re-insurance and life insurance activities. Furthermore, there also was a net increase of about 4.900 jobs in the financial services and fintech sectors last year, and the employment increase of 6.400 for the financial and insurance sectors in 2019.

In the first quarter of this year, net jobs grew by 2.200 and the banks continued to employ for roles such as business development, financial analysis, and software development. However, Mr Menon stated, if the financial sector stays above 0% growth in the second half of this year, it will achieve the Industry Transformation Map target of 4.3% annual growth in value-added over 2016 to 2020.

There might be some jobs in danger or firms downsize or initiate hiring freeze, but it’s important to keep workers employed while strengthening their capabilities. The digitalisation of the financial service sectors can also help to survive during the pandemic. 

For instance, there are several financial institutions that have been doing that and have large employers, such as the Bank of China, Bank of Singapore, DBS, Great Eastern Life, Maybank, NTUC Income, and OCBC.

Additionally, the MAS aims to strengthen the Singapore core and support the continued growth of Singapore as a leading global financial centre in Asia. As a key financial hub in the region, the country is well-placed to get the benefit from Asia’s growth and economic transformation as it appears from COVID-19.

The Next Step For Financial Sector in a Post COVID-19

There is an uncertain situation in the business, banking and financial services industries in midst of the COVID-19. The whole situation is indeed far from running its course, and it would be helpful if we think ahead to what our post-covid world might look like.

The financial industry must prepare itself to operate which could include changes in office layouts and the way transactions are implemented. The digitalisation of financial services are already on the track, and the post-covid situation is likely to be more digitalised.

In other words, moving into a post-covid-19 era means having to adapt deeper to the digitalisation and use digital platforms for the business operation. With all this situation, it is triggering greater reliance on digital and online technologies, from opening a bank account online to contactless payments.

There also has been more digitalisation in the last six months than people had expected to see over the next five years. However, the acceleration is still here, because once people have gotten used to living digitally, the economy and society will be going to change in a variety of ways.

According to Straits Times, Mr Menon applauded Singapore’s financial industry for its resilience in the face of COVID-19, and the sector had made strong investments in digital transformation over the last six years.


In addition, Singapore’s foreign exchange market has been resilient and was able to manage the unpredictable situation for the global impact of the pandemic. The current situation is full of challenges and many financial institutions have had to make significant adjustments to the new environment.

In conclusion, the financial service sector is essential in the business of risk management, and COVID-19 represents the reality of these kinds of risks. There is also a recognition of risks and consequent demand for risk management solutions. However, the financial service sector will play an important role in the years ahead.

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