Singapore’s financial services sector is unlikely to contract ahead, although growth is set to moderate in the second half amid weaker credit demand and lower interest rate margins, Ravi Menon, managing director of the Monetary Authority of Singapore (MAS) said in a speech Tuesday, according to the prepared text.
Overall, the financial services sector outperformed the city-state’s overall economy in the 2019-20 fiscal year, with value-added growth of 4.1 per cent, outpacing gross domestic product growth of 0.7 per cent, the central bank said Tuesday.
In the previous year, the financial services and fintech sectors posted a net increase of about 4,900 jobs and employment has remained firm so far this year, Menon said, citing an increase of about 2,200 jobs in the first quarter.
Menon added that technology has remained a key priority for the central bank, with recent investments in digital infrastructure having proved “particularly effective” amid the ongoing pandemic.
Fintech firms in Singapore have raised S$462 million in equity funding in the first half of 2020, up 19 per cent on-year, with S$188 million of mergers and acquisitions, Menon said.
“That this was achieved at the height of the COVID-19 crisis demonstrates investors’ confidence in the long-term value FinTech firms will create,” Menon said. “MAS is determined that the FinTech ecosystem that we have built rides through this crisis not only intact but also stronger.”
Among the MAS’ technology initiatives, Menon pointed to MyInfo, a government-run data platform that automatically supplies consumer data for filling out government e-forms and speeds know-your-customer requirements for financial services, without requiring face-to-face verification.
In addition, Menon highlighted the PayNow payment system, which lets individuals and businesses make and receive e-payments quickly without providing their bank details by using phone numbers and business identification numbers. He said PayNow registrations have crossed 4 million, with 80 per cent of Singaporeans over age 20 able to use e-payments.
Another central bank priority is sustainability, with the MAS stepping up efforts to make Singapore a green finance centre in Asia and globally, Menon said. Singapore now accounts for nearly half of Southeast Asia’s cumulative green bond and green loan issuance, he said.
More than S$8 billion of green, social and sustainability bonds have been issued in the city-state in total, and around S$750 million of green and social bonds were issued year-to-date, Menon said.
The MAS reported its financial performance for the fiscal year ended 31 March showed an investment return on the official foreign reserves of S$16.3 billion, which included investment gains of S$2.1 billion and a currency translation effect of S$14.2 billion.
The central bank posted a net profit of S$10.6 billion for the fiscal year, with half, or S$5.3 billion, to be returned to the government and the remainder added to reserves. The total capital and reserves held by the MAS increased to S$44.9 billion as of end-March.