In recent years, foreign exchange (forex) trading volumes have picked up at Singapore banks, driven by strong economic growth in Asia, among other factors, a report by The Business Times in the country stated.
Heads of the banking sector told the news outlet that banks in the country will keep seeing increased FX volumes in the future, as Singapore continues to market and build itself as an FX hub.
Speaking to the news outlet, Lim Wee Kian, DBS managing director, head of FX said: “Singapore is fast evolving into a natural hub for FX in Asia with the many initiatives to promote FX trading in the region, coupled with regulatory support to encourage key market participants to set up their pricing and matching engines in Singapore.”
MAS Developing Singapore into FX Hub
As Finance Magnates reported, the Monetary Authority of Singapore (MAS) has been working towards developing the country into a global FX price discovery and liquidity center in the region, as outlined in its Financial Services Industry Transformation Map.
In 2018, DBS Bank, a multinational banking and financial services corporation headquartered in Singapore, saw strong growth in its FX spot sector. Specifically, spot volumes for 2016, 2017 and 2018 grew by 20 percent, 28 percent and 45 percent, year-on-year, respectively, added Lim.
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“Digitisation of DBS’ FX transactions was a key driver of the strong growth in FX volumes, which started from a lower base, coupled with the strong traction from all remittance corridors of our consumer banking group and wealth management business,” Lim continued.
Not only is the forex space doing well in Asia, but the region has also achieved a significant uptick in the wealth management industry, noted Jose Luis Yepez, Citi head of FX and local markets, Asia-Pacific, Singapore.
According to data from the Asian Private Banker, although assets under management fell in 2018 from $1.69 trillion to $1.63 trillion, Asia’s private banks have still experienced a 6.9 percent compounded annual growth rate across the past five years.
“FX trading activities and volumes in Singapore have increased over the past few years due to several reasons including the strong economic growth of Asia, and a larger share of global investment flows into the region,” added Jose Luis Yepez.