SINGAPORE (June 3): The financial sector in Singapore has been “remarkably resilient” amid Covid-19, says Ravi Menon, managing director of the Monetary Authority of Singapore (MAS).
The remarks were made in his speech given at the fireside chat at ACI Live Aid: Financial Markets Give Back Zoom Video Conference last Friday (May 29).
In the same speech, Menon says the financial sector recorded stellar growth in 1Q20. However, he does not expect this good performance to continue in the rest of the year due to the weaker underlying economic activity.
Menon adds that foreign exchange (forex) trading volumes in March hit a record high because people were hedging, offloading, and readjusting their investment positions, although activity has now come down to a more normal level.
The way Menon sees it, the financial industry in Singapore is in a “good place” during the circuit breaker measures imposed from April to June, owing to the “strong investments” made in the financial sector.
Citing examples such as the retail electronic payment system, as well as the infrastructure for digital banking, or trading from home, he says a “good part” of the sector activities have now moved to virtual platforms.
Looking ahead, Menon highlighted some broad trends in the post-Covid world. These include having to change office layouts, the way transactions are being carried out, in a bid to operate in a safe manner.
Digitalisation is another key trend, he notes.
“There has been more digitalisation in the last two months than people had expected to see over the next five years. This acceleration is going to be with us. Once people have gotten used to live digitally – remote working, e-commerce, telemedicine – the economy and society are going to change in a variety of ways,” says Menon.
“Those financial institutions that adopt deeper end-to-end digitalisation, who are able to use digital platforms for their business operations that today are conducted in person or on paper, are going to have a strong competitive advantage,” he adds.
Menon also pinpoints certain new opportunities such as impact investing, and pandemic risk insurance, although it is “hard to tell at this point what the specific growth opportunities will be”, he says.
