Contribution of Banking and Financing to Singapore Economy

part of Banking and Financing to capital of capital of capital of capital of Singapore EconomyKim DuckWon1.0 IntroductionSince planetaryization of the world, banking and fiscal backing sector is now be go down very important for the ones countrys frugal ontogenesis as it is directly relate to field of study gross domestic product. Banking and Financing refer as an act of volunteer funds for stage business activities, making purchases or expend to assist its businesses to get their goals. And for Singapore, banking and pecuniary backing is taking a queen-sized severalize in economy as Singapore economy can be said that they grown up their economy by banking and funding with its character as financial hub in Asia and it is true that banking and financial operate hold on its domestic help economic ontogenesis as well by talent few advantages. So, through following paragraph leave alone mention, what is the division of banking and pay to Singapore economy and few ch whollyenges that banking and backing might compositors case in present and the future.2.0 Contribution of banking and financing to Singapore economy2.1 Contribution in Job marketFirst contribution of banking and financing to Singapore economy is job creation which would bring up Singapores economy emplacement better in the end. As Singapore has its reputation as financial hub, Singapore could get lots of Foreign Direct Investment(FDI) in part of banking and finance from many countries such as USA, Japan etc. Therefore, Singapore could make many place for the domestics to get a job in the banking and finance serve which lead lead Singapore economy posture better and will also help to drop down the unemployment rate. And truly, double shows that in more than 500 financial psychiatric hospitals the banking and finance industry of Singapore pass ons more than 114000 jobs which is 5.5% of the total workforce(Singaporean-German Chamber of industrycommerce,2013). Therefore, b anking and financing would be the factors that contribute to its domestic job market in Singapore.2.2 Foreign Direct Investment (FDI)FDI pith individual or business owns 10% or more of a foreign companys capital to control and to get into management its company in the end.(Kimberly,2015). In Singapore, banking and financing take quiet coarse role in Foreign Direct Investment(FDI). Although evidence on FDI and economic ontogeny is ambiguous, dealings between financial market and economic growth ends up with despotic conclusion-namely, well-developed financial market in the country will bring a farseeing economic growth(Alfaro,2004). and this economic growth in Singapore will keep up to attract the countries to make more FDI to Singapore by its major countries of FDI and it will lead Singapores economy to continue as positive for the future.2.3 Contribution in Small and Medium-sized Enterprises(SME)In Singapore, Small and Medium-sized Enterprises(SME) normally refer as companies which is employee at a lower place 200 or sales turnover is not more than S$100 million. It might seems that SMEs ar not important for the economic growth. However, In Singapore, SMEs are taking really important role since SMEs take up 99% of all its enterprises and employ 7 out of every 10 workers in the job market and they contribute over 50% of its national GDP(Koh, 2012). Therefore, banking and financing operate contribute a lot on SMEs to get along its economic growth even more higher by giving SMEs collateral-free loan for SMEs improvement and also to encourage someone who try to outdoors new SME. For sample, OCBC bank in Singapore is one of the financial institution who contribute to SMEs by giving financial supports up to $100,000 to start up. By this kind of contribution from bank and financial institution, Singapore economic growth will be even more higher.3.0 Challenges of Singapore banking and financing in present and futureAlthough banking and financing contribut e a lot in Singapores economy growth, there are some challenges that might face in the present and future such as dependence of international economy, governing body regulations and cyber villainy.3.1 Dependency of World economyFirst challenge factor that banking and financing in Singapore would face in the present and future is dependency of global economy. Needlessly to say, Singapores main contributor of its economic growth is come from FDI in banking and Financial services as Singapore is financial hub in global economy. However, because of its high dependency of global economy, Singapores banking and financial services could not avoid from world financial crisis as well which makes main FDI countries to crucify their investment to Singapores financial services. And global financial crisis in 2008 started from USA was the example of showing that Singapores banking and financial service is not free from it. and signifiers that an average growth rate of nearly 8 per cent from 2004 to 2007, Singapore was the first eastmost Asian country to fall into a recession from the global economic crisis after July 2008. This clearly reflects the greater vulnerability of the Singapore economy to global economic shocks(Shandre,2009).3.2. Shortage of skillsShortage of skills would be the one of the challenge that Singapores banking and financial services would face in the present and in the future. Because most of the banking and financing services are now digitalized and specialized, these sectors are seeking workers who are specialized and have great knowledge of technology. But as it need long time to get experience and skills to be specialize in the parts, Singapores banking and financial services will face the shortage of skills. And that will make the sectors to authorize whole lot of money to train and educate the workers to be specialized in their work.3.3 Cyber CrimeLastly, Cyber crime could be the another problem for banking and financing and to Singapor es economy growth in the present and the future. As technologies improved, use of online banking and financing services rate is increasing which makes most of bank and financial services done by online. However, because of technology improvement banker and financial services are bother from cyber crime. And the reason why cyber crime is become a imminent part for these sector is because they need to spend massive money to adjust the victims and also to buy or develop the system to prevent the cyber crime such as financial fraud online which will make these sectors to overplus their money. And truly, Direct financial losses in Singapore due to cybercrime grew from US$944 million in 2012 to US$1 billion in 2013(TSE,2014). And this figure will also affect to FDI negatively in banking and financial services which will also threaten Singapores position as a bewitching country for FDI.4.0 Strategic planning to overcome challenges of banking and financing of Singapore in the present an d future4.1 aegis and regulationAccording to a 2013 Norton report, Singapore cybercrime victims had the highest average per capita losses worldwide in 2013, of US$1,158. This is four quantify the global average of US$287 and twice the figure set 12 months earlier in the country(TSE,2014). Therefore, banking and financial services should put an effort to reinforce credential and regulation of its online system in banking and financial services to quail wasted money. For example, these sector can make it compulsory to the workers to use security software to protect cyber crime. And they also can make a teams of online security to prevent cyber crime such as hacking and online fraud to avoid from losing money.4.2 grooming and trainingIn todays world of banking and financing need quiet groundbreaking skills in computer to do a job since most of kit and boodle are done by computers and online. However, as workforce ages are suppuration up, lack of skills in banking and financing area become a big problem. Thus, banking and Financial services should re-educate and re-training the workers to get the job done. To do so, banking and financial services sector should create a specialized team in the works place and establish a course to training and educate the workers whom effort with the skills needed in the work. So that in the end all the workers will be enhanced in their working part which will help to increase productivity.4.3 Government tax policiesAs banking and financial services in Singapore affected a lot from global economy, Government should ebb the tax rate for the companies who makes investment their money to banking and financial services in Singapore. And to do so, Singapores banking and financing sector will be5.0 ConclusionAs Singapore considered as global financial hub, banking and financing sector in Singapore will still continue to take a huge role in economy growth in the future. They will provide more money to the country as main contrib utor of its GDP growth and will also provide more jobs for the domestics as it provide 5.5% of total workforce in Singapore in present. However, to do all this happen, Singapore should handle all problems that challenges of banking and financing services would face in the future such as cyber crime, lack of skills and high dependency of global economy. To handle this kind of problem, Singapores banking and financing sector should make good turning a track to re-train and educate workers in financial area and innovate the service way in banking and finance to avoid cyber crime. Then in the future outlook of Singapore banking and Financing will be very positive as a financial hub in the Asia and in the world.Reference ListAlfaro, L, 2004. 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