Chairman's Message

This year marks the 50th anniversary of MAS. We have come a long way since our beginnings in 1971. MAS has progressively over the five decades become a central bank and integrated financial supervisor of repute amongst its international peers, a source of confidence domestically, and an active partner with the industry in developing opportunities for Singapore’s growth as an international financial centre. MAS’ standing is testimony to the vision, dedication, and commitment to excellence of its past leaders and staff.

The world is still in the midst of the COVID-19 pandemic. It is also getting prepared for an endemic COVID-19 situation. Risks to public health and economies will remain elevated for some time. However, there will also be a premium on trust and stability, as well as innovation and agility. Both Singapore and the financial sector are well placed to emerge well in this environment, and to contribute to sustained growth and stability in Asia. MAS remains active in working closely with the financial industry and other stakeholders to develop opportunities in this new normal while managing the risks.

We look back at a year that saw the world’s worst economic setback in more than 70 years, and immense loss of lives. Singapore has one of the lowest fatality rates arising from COVID-19, but the pandemic and public health measures to contain it, both globally and locally, led to our worst full-year recession since independence in 2020. The global economy should continue to improve over the rest of 2021, supporting Singapore’s export-oriented sectors. The domestic-facing industries are expected to recover more gradually, on the back of macroeconomic policy stimulus, progressive re-opening of the economy, and the sustained rollout of vaccinations. After a period of mild disinflation, core inflation has also picked up gradually, though it remains well below historical norms. The exchange rate policy band for the S$NEER remains accommodative on a stable, 0% appreciation path.

MAS’ efforts to mitigate the economic impact of the COVID-19 pandemic centered on maintaining monetary and financial stability and supporting individuals, businesses and financial institutions to manage the challenges brought on by the pandemic. The introduction of the MAS SGD Term Facility and MAS USD Facility was timely in helping to meet the stronger demand for SGD and USD liquidity in Singapore and the region as the pandemic unfolded. MAS collaborated with the financial industry to introduce credit and insurance support measures to help individuals and small and medium-sized enterprises (SMEs) manage their financial commitments. MAS also provided low-cost SGD funding at 0.1% to support lending by banks and finance companies to SMEs. We also enhanced training support schemes to upskill Singaporeans for new jobs in the financial sector, as well as measures to position financial institutions and FinTech firms for stronger growth.

The banking system entered the crisis from a position of strength. We expect domestic systemically important banks to remain resilient and well positioned to provide a smooth supply of credit to the economy. However, as financial institutions continue to digitalise their customer journeys and business processes, there is a need to guard against increasingly sophisticated cyber threats. Technology risks are compounded by a large proportion of staff operating outside an office environment. MAS has enhanced its Technology Risk Management Guidelines and is working on new rules aimed at addressing the risk of impersonation fraud.

The Payment Services Act was amended to combat the misuse of digital payment tokens for money laundering and terrorism financing, and to allow MAS to impose measures on digital payment tokens service providers for consumer protection. MAS implemented initiatives to bolster the financial literacy among the public and to create awareness of the risks involved in dealing with cryptocurrencies.

The financial services sector grew by 5.1% in 2020, supported by broad-based growth across banking, insurance, fund management, and payment services. The financial and FinTech sectors also created a net 2,500 jobs, which were taken up by locals. The robust performance enabled the financial sector to meet both the value-added and jobs growth targets in the 5-year Industry Transformation Map (ITM) for 2016-2020. Together with the Institute of Banking and Finance - which was appointed Jobs Development Partner for Financial Services by the National Jobs Council - MAS has sharpened its ability to identify employment patterns amongst financial institutions and to proactively engage them on upskilling and re-skilling their workforce as well as to help Singaporeans enter the industry.

We are forging ahead with our longer-term goals for the financial sector, particularly in digital transformation. In 2020, MAS awarded digital banking licences to four successful applicants. Together with industry and government partners, MAS launched the Singapore Financial Data Exchange (SGFinDex), a digital finance infrastructure which allows Singaporeans to consolidate their financial information for more effective financial planning. Despite the challenges of COVID-19, the 2020 Singapore FinTech Festival (SFF) x Singapore Week of Innovation and Technology (SWITCH) attracted strong participation globally, with more than 3.5 million session views clocked on the online event platform and social media. In 2020, FinTech investments into Singapore posted a strong 34% year-on-year growth to reach a record S$1.4 billion, as reported by the Boston Consultancy Group.

MAS issued its inaugural Sustainability Report earlier this month, setting out its strategies to facilitate Asia’s transition to a low carbon future and support a sustainable Singapore. The strategies span across MAS’ key functions. As a financial regulator and supervisor, MAS has issued Guidelines on Environmental Risk Management for banks, insurers and asset managers. MAS is actively involved in the International Organization of Securities Commissions (IOSCO) Sustainable Finance Task Force, and is co-leading work contributing towards the development of a globally applicable sustainability reporting standard. MAS is also building a climate-resilient investment portfolio and implementing portfolio actions to both mitigate climate risks and capture opportunities from a low-carbon transition. In addition, MAS is working actively with the industry to develop innovative green finance products and FinTech solutions that can mobilise private capital to finance green and sustainable projects in Singapore and the region.

On behalf of the Board, I thank all MAS staff, our partners and financial industry players for their continued efforts to maintain the high levels of service and excellence that are our hallmark. Let us work together relentlessly to solidify Singapore’s standing as an internationally respected, resilient and dynamic financial centre.

Tharman Shanmugaratnam