<p>  The rules and manner of the financial system of the world will soon undergo huge changes. Many technological innovations in the financial services sector are not taken seriously because of a lack of proper knowledge. Blockchain is a good example. It demonstrates great potential in resolving business transactions without using financial intermediaries.</p><p>  For these reasons, the ITM (Financial Sector Transformation Chart) will be crucial to guide the development of the financial sector and ensure Singapore's competitiveness, and also to achieve the country's main goal - to become the world's leading capital management center.</p><p> </p><p><span style="text-decoration: underline;"><em><strong>Singapore financial sector is waiting for a number of changes</strong></em></span></p><p>  MAS (Monetary Authority of Singapore) <span style="font-size: 1.17em;">has set itself three goals, the achievement of which will help transform the financial services sector, namely, become the Leading International Capital Management Center. In particular, MAS is working to consolidate the status of Singapore, as a center of excellence in technology management and innovation.</span></p><p> </p><p><span style="text-decoration: underline;"><em><strong>Become the World Monetary center and the center of the Asian liquidity<br /></strong></em></span></p><p>  At the moment, Singapore is the third largest currency center in the world. To improve its positions, MAS intends to encourage key participants to consolidate their alignment and pricing mechanisms in the country so that they can receive better liquidity and greater efficiency in the performance of foreign exchange transactions.</p><p>  Other objectives of MAS:</p><ul><li>Establishment in Singapore of financing platforms in the private market to attract a wider network of investors.</li><li>Make Singapore the first in Asia in terms of investment in infrastructure.</li><li>Make Singapore the leading center of Asian fixed income.</li><li>Attract world capital for Asian insurance and risk transfer.</li><li>Create utilities, including electronic payments, digital identifiers and electronic checks KYC - Know Your Client.</li></ul><p>  The growth rate of the financial sector is projected at 4.3% per year until 2020. This is above the stated 2-3% growth in the set of national indicator strategies. The financial sector accounts for 13% of Singapore's GDP. In this area, approximately 200 thousand people work.</p><p>  According to the September MAS data, the growth in assets under management was 7% in 2016 and reached a mark of 2.7 trillion Singapore dollars.</p><p>  According to the executive director of Oversea-China Banking Corp. Sam Cyena, now is the best time to determine the priorities of the financial sector. However, it is necessary to prepare an infrastructure for providing the sphere with people, technologies and means that are tightly regulated.</p><p>  On October 30, 2017, the Transformation Map (ITM) was published by the E. Kung - the Minister of Education (Higher Education and Skills) and the representative of the Currency Board.</p><p>  Singapore - the first in Asia and the third in the world competitive financial center. However, the country faced competition from new financial centers (Shenzhen and Abu Dhabi) and new technological developments (FinTech and crypto currency), which could lead to a change in traditional banking and financial activities. This will affect the principle of data analysis, transaction processing, portfolio management and client consulting, internal processes and much more.</p><p>  Therefore, Nanyang Technological University conducted a study on what awaits Singapore on its way to realizing global ambitions regarding becoming the main international financial center.</p><p> </p><p><span style="text-decoration: underline;"><em><strong>Midshore Singapore on its way to a global financial center</strong></em></span></p><p>  The objectives of ITM:</p><ul><li>Increase productivity.</li><li>Higher growth rates.</li><li>Creation of 4,000 jobs each year until 2020.</li></ul><p>  It is worth noting the worldwide trend to reduce jobs by banks due to the transformation of the region under the influence of new technologies, robotics and artificial intelligence. According to Vikram Pandita, who led Citigroup Inc., about 30 percent of bank workplaces will disappear within the next five years. Singapore is going the other way.</p><p>  In order to strengthen Singapore's status as a foreign exchange exchange center and a capital management center, a plan was developed to create new jobs in the financial sector of the economy, as well as a plan to mitigate the effects of rapid technological change. According to the Monetary Authority of Singapore (MAS), these measures are aimed at achieving an increase in the sector's growth by 4.3% per year, which will affect the growth of the country's economy as a whole.</p><p>  The tasks of ITM Singapore include the desire of MAS to turn Singapore into a leading center:</p><ul><li>money management;</li><li>management of Forex markets;</li><li>fund management;</li><li>domiciliation;</li><li>infrastructure financing;</li><li>Asian insurance.</li></ul><p>  Key growth strategies of the financial sector within the ITM:</p><ul><li>Support for the development of Asia.</li><li>Implementation of training programs.</li></ul><p>  Use of technological achievements. Includes joint creation of common utilities for electronic payments and a digital identifier, equipping financial sector professionals with IT skills and investing in research and development to create new solutions, such as distributed interbank payment systems.</p><p>  With the growing prevalence of FinTech, the Singapore Monetary Authority (MAS), is considering the latest strategy to promote technological development as a key aspect of the ITM.</p><p> </p><p><span style="text-decoration: underline;"><em><strong>Advanced training - a guarantee of competitiveness</strong></em></span></p><p>  ITM emphasizes the growing prevalence of technology in financial transactions and services. They can range from non-cash payments to the use of data analytics to ensure a closer relationship between consumers and financial products. Potentially destructive shifts in the ways and processes through which financial services and products are bought and sold will be reflected in such markets, such as capital management, forex and fund management. Consequently, in the medium and long term, these markets will continue to strongly affect the landscape of financial services in Singapore.</p><p>  To cope with these shifts, financial sector professionals need to have the skills and competencies necessary to move to a new level of a financial vector based increasingly on data and mediated. An important element of such efforts is preparation for changes in the nature of jobs in the financial sector.</p><p>  For example, the increasing prevalence of robot-advisory services in the management of capital can lead to obsolescence of asset managers' services. Using automated software for portfolio management based on algorithms, robotic consultants are able to manage investment portfolios of clients more efficiently and cheaper.</p><p>  This means that asset management companies will give priority to new skills, such as coding and building algorithms in comparison with traditional network skills.</p><p> </p><p><span style="text-decoration: underline;"><em><strong>Midshore Singapore pays less attention to lending</strong></em></span></p><p>  ITM pays special attention to such areas as asset management, forex, infrastructure finance and FinTech, and less attention is paid to lending. There are several possible reasons for this.</p><p>  Singapore - the center for lending. According to the report of Deutsche Bank, published in 2016, the debt burden increased from less than 240 percent of GDP in 2009 to 265 percent in 2015. This is largely due to the high level of lending to the private sector of Singapore, for which there are restrictions on higher growth.</p><p>  The growing role of FinTech and technological endeavors in the provision of financial loans and capitals indicates that the source and nature of lending operations can shift from traditional banks and lenders to new technology firms and start-ups.</p><p>  In the markets of developed countries, such as the US, there are new peer-to-peer credit and crowdsourcing portals. Therefore ITM provides for a more technologically advanced financial services sector that favors subsectors that can use new technologies to expand their business models. These include capital management, forex and FinTech, where robo-advisors, algorithms and online trading platforms enable firms to provide financial services through operational and automated platforms.</p><p>  The future of the Singapore financial services sector and the nature of the subsectors that it includes will therefore be driven by technological advances. This means that FinTech will increasingly dominate the financial sector of the future and choose sub-sectors or firms that are able to adapt FinTech to their existing businesses.</p><p>  In Singapore, the population is intelligent and has a good command of English. The country has a strong rule of law and anti-corruption culture. Therefore, the government strengthens financial consulting as a core competence in an area where jurisdiction has a natural advantage.</p><p> </p><p><span style="text-decoration: underline;"><em><strong>Transformation of the economy of Singapore</strong></em></span></p><p>  While ITM financial services have provided a clear policy direction for the financial sector, its impact can go far beyond financial services. Indeed, if the sectors are interdependent, it is not surprising that the government takes a central strategic approach in the planning and implementation of ITM in all sectors.</p><p>  For example, ITM for retailing emphasizes the expansion of e-commerce and the provision of electronic channels for retailers to expand their markets locally and internationally. Similarly, ITM for wholesale plans to build trade links through digital markets and platforms.</p><p>  To implement these strategies, an efficient and reliable infrastructure for online payments and transactions should be created, as well as necessary skills and opportunities to operate and regulate this infrastructure, plus, platforms are needed that will make up this infrastructure.</p><p>  In other words, the strategies reflected in the ITM financial services will facilitate and complement the digitization strategies in other ITMs.</p><p>  This demonstrates the key role of Singapore's financial infrastructure in supporting payment platforms used by retailers and wholesalers, such as NETS, credit card payments and others.</p><p>  Therefore, it is necessary to understand the recently released ITM financial services in this broader context and to assess the relationship between the different ITMs and the way to support and strengthen each other in the current economic transformations of Singapore.</p><p></p><p style="text-align: center;"><em>If you have any questions, <strong>Castle Family Office</strong> specialists are ready to answer them! Please, write to us at <strong><em><span face="Calibri" size="3"><span lang="EN-US"><span face="Calibri" size="3"><a href="mailto:info@castle-familyoffice.sg">info@castle-familyoffice.sg</a></span></span></span></em></strong> </em></p>