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Singapore to spearhead regional access to financial services

SINGAPORE — Broadening access to financial services will be a key priority when Singapore assumes the chairmanship of the regional Association of South-east Asian Nations (Asean) group next year, said Mr Ravi Menon, managing director of the Monetary Authority of Singapore (MAS).

SINGAPORE — Broadening access to financial services will be a key priority when Singapore assumes the chairmanship of the regional Association of South-east Asian Nations (Asean) group next year, said Mr Ravi Menon, managing director of the Monetary Authority of Singapore (MAS).

His remarks were made at the opening of the 2017 Asian Banking and Finance symposium co-hosted by the Singapore central bank and the Federal Reserve Bank of San Francisco yesterday. Asian banks have stepped up in recent years to play a greater role in the region, even as global banks have retreated, said Mr Menon.

Helped by “stronger fundamentals”, Asian banks now account for more than two-thirds of non-local lending to the region, from just one-third in 2007.

In wealth management, Asian banks have been acquiring the regional business lines from global banks, as in OCBC Bank’s acquisition of Barclays’ wealth and investment management business in Singapore and Hong Kong late last year. The potential for growth in financial services is huge.

A 2015 World Bank study found that of two billion adults worldwide with no bank accounts, more than half were in East and South Asia.

Ironically, while the mobile phone penetration rates of Indonesia and Vietnam are above 100 per cent, only a third of the population is formally banked, or has proper access to financial services, said Mr Menon.

Citing a study by the Asian Development Bank, he said that using financial technology (FinTech) to enhance financial inclusion would boost gross domestic product by between 9 per cent and 14 per cent in large economies such as Indonesia and the Philippines, and up to as much as 32 per cent in Cambodia.

“Broadening access to financial services will offer Asian banks — and FinTechs — the opportunity to grow their business while serving a social purpose. Financial inclusion will be a key priority in the economic co-operation agenda when Singapore assumes the chairmanship of Asean next year,” said Mr Menon.

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