Singapore’s financial service providers are buttressing ASEAN’s development, helping companies internationalize through cross-border financing and capital-raising.
As ASEAN’s financial services hub, Singapore plays a key role in driving the region forward to capture its new phase of dynamism through an increasingly strong focus on financing infrastructure and enterprise across the region, as well as bringing in private capital.
According to the Asian Development Bank (ADB), between now and 2030, ASEAN will require total infrastructure investment of $2.8 trillion. Meanwhile, new projects around the region as part of China’s trillion-dollar Belt and Road Initiative (BRI) are driving even further demands for funds.
Banking without borders
As a result, Singapore’s local banks are stepping up to provide new cross-border financing solutions. One such example is United Overseas Bank (UOB). One of Asia’s leading financial institutions with a network of more than 500 offices spanning 19 countries and territories, it recently announced a partnership with Shanghai Pudong Development Bank (SPD Bank) to assist businesses in taking advantage of opportunities that have arisen from the BRI.
“We recognized early the importance of supporting the region’s growth. That was a very important realization and has influenced our business focus over many years,” says Susan Hwee, Managing Director and Head of Group Technology and Operations at UOB.
In addition to financial solutions, the bank also supports corporates with business advisory services through its dedicated Foreign Direct Investment (FDI) Advisory Unit – a one-stop service for foreign companies looking to set up regional operations – and through its ecosystem of strategic partners including government agencies, trade and industry associations and professional service providers across the region.
With regional expansion a major focus for corporates in ASEAN, UOB has positioned itself as a facilitator, enabling Singaporean businesses to internationalize while providing foreign firms with the support they need to access new markets.
Earlier this year, UOB set up China desks in Indonesia, Malaysia, Singapore, Thailand and Vietnam to help companies understand how best to navigate the diverse economic and business environments across these markets. In recognition of its contribution to facilitating regional trade and investment flows by connecting companies to business opportunities, UOB was named ‘Best Regional Bank of the Year’ for the Belt and Road Initiative in Southeast Asia at the 2018 Asiamoney New Silk Road Finance Awards.
Reaching the ASEAN population
A key challenge to supporting ASEAN’s growth is a lack of physical access to financial services, with low numbers of banking branches and ATMs in countries such as Cambodia, Vietnam and Thailand. The problem is most visible in Indonesia, whose 12,000 islands make it very costly to provide banking distribution across the archipelago.
To tackle this, UOB is leveraging technology to expand its reach. It plans to launch a fully digital bank in its key ASEAN markets with the goal of scaling its regional customer base by as much as five million in the next five years through a completely digital onboarding process.
Supporting business growth
In addition to financial services and banking, Singapore is also the obvious choice for corporates seeking to raise funds, with the Singapore Exchange (SGX) now Southeast Asia’s largest stock market, as well as Asia’s leading derivatives market.
“ASEAN offers investors the growth story they are looking for, and marketplaces like SGX can help build and facilitate global connectivity between investors and issuers,” says Boon Chye Loh, CEO of the exchange. “SGX is the go-to fund-raising destination for ASEAN companies going global, and global companies look to us as a gateway into ASEAN.” Indeed, today, 40 percent of its listed companies, or 50 percent by market capitalization, come from outside of Singapore, demonstrating the international nature of capital-raising in the city-state.
In the 20 years since the Asian financial crisis of 1997-1998, ASEAN has been strengthening its financial institutions, building a strong foundation for future development. And it is Singapore, as the financial heart of the bloc, which will continue to drive this growth.