By Nimra Noor, International Business Writer
On Monday, October 31, Board Member of The Monetary Authority of Singapore (MAS), Ong Ye Kung, announced this he has launched an Industry Transformation Map (ITM), outlining its plan to seal the country’s status as a leading global financial center in Asia, with the primary aims of developing the sector more than 4 percent a year and increasing employment rate.
Mr. Ong, who is also Minister for Education, said that the ITM is prospected to achieve a 4.3 percent industry GDP growth each year over the medium term. This would be “nearly twice” as fast as the overall economy, with more than half of the growth to be driven by increased productivity. Additionally, the ITM also aims to create 3,000 jobs in the financial service sector such as in banks and fund management companies in the next three years, alongside 1,000 jobs in the financial technology sector to be created each year until 2020.
As an agenda for continuous innovation and technology adoption, MAS reported that there is a strong emphasis on encouraging the adoption of technology to increase efficiency. “With technology transforming the way financial services are produced, delivered, and consumed, it is critical that Singapore’s financial sector also transform, to stay relevant and competitive,” the Monetary Authority of Singapore said.
The country will be taking steps such as joining forces with financial institutions to create common utilities for services including electronic payments, along with investing in research to develop solutions such as “distributed ledger technology” for inter-bank payments and trade finance. Additionally, the MAS also aims to build private market funding platforms, with the primary aim of an easier connection of companies with investors to facilitate funding. This will enable Asian growth companies to gain better access to a wider network of investors. Besides building private market funding platforms, the MAS plans to establish itself an infrastructure financing hub, with an intention to make it easier for Asian infrastructure projects to gain funding by using innovative new technology. To achieve this, members of the Singapore financial ecosystem will be working with multilateral development banks, which intend to provide financing for national development.
However, Chua Hak Bin, Maybank Kim Eng economist, said a challenge for Singapore is maintaining a balance between staying at the forefront of technology and ensuring that technology is not too disrupting for the sector. “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,” he said. Accordingly, in the process of maintaining financial security, MAS will continue to improve its regulatory approach and to support enterprise and innovation.
Another significant challenge for MAS and its ITM strategy is in retaining talent amid a shortage, as countries around the world are also facing talent shortages and are willing to offer a lot for these talents, according to Reuters.
Despite these presumed obstacles, the MAS further seeks to develop Singapore as a leading center in Asian for fixed income, and a global capital for Asian insurance and risk transfer.
A version of this article appeared in the Tuesday, November 7th print edition.
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