Singapore is positioning itself as a new regional centre for Islamic finance - in direct competition with Malaysia and Indonesia for global capital flows.
Mario Bassi of Profidata Group
Jul 18, 2012
As an international financial centre, Singapore is keen to play a role in Islamic finance by leveraging its capabilities and credentials in wealth management, project financing and trade financing.
The government has undertaken several initiatives in areas such as taxation, capital markets, REITs, Takaful insurance, and Islamic equity indexes, in order to improve Singapore’s attractiveness for Islamic finance.
From high-level state delegation visits to Middle Eastern countries to key speeches at Islamic finance conferences, Singapore has explicitly demonstrated its interest and enthusiasm in promoting Islamic finance.
This improved climate has prompted several banks in Singapore to examine specialist subsidiaries and Islamic windows. DBS Bank took the lead in 2007 and launched the Islamic Bank of Asia to focus on corporate capital markets and private banking services.
Singapore’s strategy is based on the understanding that it cannot be a truly global financial centre if it does not offer Islamic financial services. With its small domestic market, the greater opportunity for Singapore lies in leveraging its existing infrastructure to offer services in capital markets and wealth management. The objective is to enable financial institutions in Singapore to add Islamic finance products and services to the broad range of services that they already offer.
Singapore is well-placed to contribute to capacity-building and understanding of Islamic finance products, leveraging on the expertise and talent base in conventional financial products and services.
It may not overtake Bahrain or Malaysia to become a purely Islamic finance hub, but Singapore’s open markets, efficient infrastructure and transparent regulations will remain attractive to both conventional and Islamic financial services players.
Senior Advisor Business Development APAC at Profidata Group
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