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Singapore is a critical international financial hubs, it is home to over more than 700 financial institutions and 200 bank managing a wide range of banking and financial services. It is also a key asset management center in the Asia-Pacific area, and a large portion of the top worldwide fund managers have being here. The Singapore is a derivatives trading center and also additionally positioned the second largest foreign exchange market in Asia. Some of its strengths incorporate a strong commodities innovation, for example, the presentation of Real Estate Investment Trust (REITs) in Asia (no including Japan), listed infrastructure fund, shipping trust and business trust. Singapore keeps on being the Asia-Pacific center for over-the-counter (OTC) product derivatives trading, and is a critical reinsurance and insurance regional center for international insurance company. With an aggregate asset size of nearly US$2 trillion as of December 2013, the banking and finance sector has been important to Singapore’s part in financing regional and local growth, for instance, in facilitating trade, the building of infrastructure and corporate finance.
With the contribution to Singapore, the banking and finance service sector is the one of the key factors of Singapore economy, it has contributes around 12 per cent of Singapore GDP and gave 200,000 employments in Singapore. Singapore has also a succeeded in standing as one of the world’s main five financial hubs.
Contribution of these sectors to the Singapore economy
Attracting foreign direct investment
Foreign Direct Investment (FDI) is refer to an investment made by a nation or an organization, into another nation or an organization. Numerous developing countries and transition economies place attracted foreign direct investment (FDI) high on their agenda, as Foreign Direct Investment is usually seen as a means of obtaining technological transfers and expanding rivalry or attaining to a more efficient allocation of resources in the internal economy. Singapore is one of the pioneers in the utilization of this development strategy. Over the past few years, the multinational companies (MNCs) have conveyed numerous of advantages to Singapore, particular in terms of bringing in a new expertise and technology to sustain Singapore’s competitiveness and offer employment and higher salary for Singaporeans
Financing Small-Medium Enterprise
Small-Medium Enterprise (SMEs) is refer to non-subsidiary and independent company which hire fewer than a given number of worker. SMEs are considered an critical contributor to the economy as drivers for, develop a pool of skilled and decreasing unemployment and semi-skilled workers as a basis for the future industrial expansion; provide an excellent breeding ground for entrepreneurial and managerial talent, the critical shortage of which is usually a great obstacles to economic development, and so on. The Small-Medium Enterprise sector is also an important pillar of Singapore’s economy. They are contribute more than 70 per cent of employment and 50 per cent of economic output.
The Singapore regulatory and institutional, and banking and financial structure is an elements on the design of bank loan syndicates in emerging market economies. The structure of syndicates is adjusted to improve observing of the borrower and to enhance the efficiency of re-contracting process in the event of borrower’s misery. The principal syndication motives, for example, regulatory pressure and management costs reduction, loans portfolio diversification; provide the loan in emerging markets economies.
Challenges facing by these sector in the present and future
The Cyber-crime is refer to the more and more conducted by an underground market-makers, exceedingly specialized chain of software break-in specialists and fraudsters who change into stolen identities and passwords into a financial gain. Criminals can keep data for quite a long time or even years before utilizing it to cheat a victims. More of the criminals are aiming a victims on internet, with cyber blackmail and online scams on the ascent, even as Singapore’s crime rate hit a 30-year low.
Money laundering and Terrorism financing
Money laundering is the act of conceal the true origin of illegal fund and making them seem legal. While terrorist financing is the act of collecting, soliciting or providing funds, from both legal and illegal source with the proposition of supporting terrorist organizations or activities. A money launderer’s main targeting is to cover the source of funds, a terrorist financier main targeting is to cover the use of funds.
With the expansion of both physical and electronic financial infrastructure, Money laundering and Terrorism financing risks exercises are getting increasingly sophisticated and hard to identify. An absence of difficultywith which money valuables can now move across borders means that enforcement agencies and regulatory authorities inside and among nations must have to coordinate and cooperate effectively to address emerging threats.
Shortage of skilled talent
A skills shortage is refer to employee entering the workforce and an abilities deficiency among existing employees insides the organization. Such a shortage spread everything from the short of vocational and technical skill through to a shortage in management skills and soft skills. As Singapore is a shortage of local talented people nation and facing a shortage of high skill talent problem. Even the wages costs have risen up and many company are seeking it difficult to get the quantity of worker they require as they are willing to pay higher wages. So the Singapore government accommodates these realities and address the problem by adopting an open door policy to international talent and expertise in education and training policy.
Strategic Planning by these sector in the present and future
Security and regulation
Further the challenge of cyber-crime, the Singapore government cooperate and participate with Interpol. Interpol is the world’s largest police organization and help in Singapore concentrated on combat a cyber-crime. The International Criminal Police Organization now has a dedicated office to lead its combat against cybercrime worldwide.The Cybercrime Satellite Centre, which was opened by Microsoft at its technological centre at One Marina Boulevard (Singapore), targeting to identify, remove and detect cyber threats such as malware. It will tie up with existing online security organisations in Singapore, this involved the Interpol Global Complex for Innovation and the Computer Emergency Response Team which share and given information on emerging threats.
Government security policy
Further the challenge of money laundering and Terrorism financing, the government has taking measure. The National Risk Assessment (NRA) is a government-wide activities that to improve and develop our collective understanding of the Money laundering and Terrorism financing risks in the country. The NRA takes reference from the Guidance on National Money Laundering and Terrorist Financing Risk Assessment published by the Financial Action Task Force (FATF) in February 2013. The NRA is taking action under the ambit of the Steering Committee for combating Money laundering and Terrorism financing threats, which involve the Permanent Secretary of the Ministry Director of Home Affair, Permanent Secretary of the Monetary Authority of Singapore.
Education and training
Further the challenge of shortage of skilled talent, the government has implement a strategic to addressing the problem. The Workfare Training Support (WTS) covers more than 8,000 Certifiable Skills training courses supported and recognized by the Singapore Workforce Development Agency (WDA) as well as academic Continuing Education and Training (CET) courses accepted by the Ministry of Education (MOE).The Workfare Training Support (WTS) program is present to complement the Workfare Income Supplement (WIS) while WIS encourages older low-wage employees to work by supplementing their earning and retirement savings, WTS encourages them to update their capability through training so that they can enhance their employability, making more money and upgrade to better jobs.
The Monetary Authority of Singapore support the banking and finance sector
The Monetary Authority of Singapore (MAS) has assist Singapore conducts regular assessments of threats and vulnerabilities arising from developments in Singapore and the world economy, and evaluates their implications for the soundness and stability of Singapore’s financial system. The analyses and results are contained in the Financial Stability Review (FSR), which means to contribute to a greater understanding within market participants, analysts and the public on issues influencing Singapore’s financial system.
The future outlook of banking and finance service sector in Singapore.
The Singapore economy is anticipated to continue on a moderate growth trajectory over the next few quarters. While some segments within the external-oriented sectors should advantage from the uplift in the US economy. Simultaneously, within the domestic-oriented sectors, performance will also be uneven. According within the services sector, the financial and insurance services industry is the most optimistic (according to the Department of Statistics Singapore). A net weighted balance of 34% of company foresee the revenue to raise for the first quarter of 2015. Banks and financial companies expects that the world economy will continuously increasing.
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