10 Proven Financial Institutions in Singapore Providing Financial Services and Consulting for Businesses

How a Financial Service Company Helps You Manage Banking, Finance, and Investments

Over the past 50 years, Singapore has earned a reputation as a secure and progressive financial centre. This is attested by the more than 1,200 financial institutions within its borders offering an array of products and services. The primary financial services industries located in Singapore are banking, insurance, and capital markets. The key characteristics of the financial centre in Singapore include:

• An efficient, business-friendly environment
• An effective regulatory environment 
• Excellent infrastructure 
• Availability of highly skilled finance professionals

Banks are the primary financial service providers, especially for businesses. In addition to traditional lending and financial holding services, banks in Singapore also provide more sophisticated banking services like corporate and investment banking. Singapore is not only a hub for wealth management and private banking, but it is also home to many high-net-worth individuals from all over the world. The deep and liquid capital markets in Singapore facilitate greater financial intermediation within Asia, making it an ideal place to do business.

What are Financial Services?

Among the things money can buy, there is a distinction between goods (something tangible that lasts) and services (a task someone performs for you). Examples of financial goods are mortgage loans and car insurance. Meanwhile, a financial service is the process of acquiring such good. In other words, financial services are the transactions between businesses and financial institutions through which businesses can obtain goods.

However, distinctions within the financial sector are not always easy to see. For example, someone who works in the real estate industry, such as a mortgage broker, provides a service by helping customers find a house loan with terms that suit their circumstances. However, those same customers could also borrow on their credit cards or from a commercial bank.

What makes up financial services?

Commercial banks make a profit by taking deposits from customers and then lending that money out at a higher interest rate. Investment banks help companies raise funds through different means such as issuing stocks or bonds. Insurance companies charge their customers premiums for insurance policies that protect them against certain risks, like car accidents or fires.

The list of institutions, services, and products that make up the financial services sector differs from one country to another. In general, however, it includes the central bank; deposit-taking organisations such as banks, building societies, and mortgage companies; credit unions or cooperatives; insurance and pension funds; finance companies; cash management firms and others engaged in financial intermediation or asset management.

Financial intermediaries are organisations that help provide capital, including investment firms, leasing companies, hire purchases, and the provision of personal and consumer credit. To get a full picture of the financial services sector, the different types of financial institutions should not only be considered but also the businesses that support its operation.

How financial services work

The financial services sector of any country usually consists of three different parts that work together. These are:

• the financial firms and regulatory authorities, like banks
• the financial markets and their participants, such as those who issue or invest in bonds, stocks, and currency
• the payment system (this can be cash, checks, or electronic payments) and its various participants (usually banks)

Interaction between these factions allows investment or spending money to be transferred from one area of society to another.

The bank regularly offers numerous services to customers. For example, one service it provides depositors is ensuring that deposits can be withdrawn whenever they want. Another service for mortgage borrowers is being able to finance a house and make payments over an extended period. Businesses and governments visit banks to take care of various financial needs, such as receiving loans. The bank is compensated for its services by the difference between the loan's interest rates and what it must pay depositors.

Financial institutions typically engage in activities such as borrowing and lending money, supplying insurance cover, leasing property, and investing in assets. In most countries, banks are the largest deposit-takers and financial service providers. However, the market shares and power of other organisations like insurance companies or post office savings institutions are growing.

In the last ten years, the unexpected success of what is called the shadow banking system has been observed. This term refers to practices and entities that collectively operate outside of traditional financial institutions, such as hedge funds, private equity funds, money market funds, and special investment vehicles.

Meanwhile, financial service professionals refer to businesses or practitioners that provide personalised, expert advice in fields such as accounting, public relations, advanced analytics, and design, real estate agency work, and more.

Intermediation in Financial Services

The financial sector performs the essential role of intermediation, which is defined as channeling money from savers to borrowers. In other words, it matches people who want to lower risk with those willing to take on that risk. People saving for retirement, for example, benefit from this type of intermediary service. The higher the return future retirees earn on their money thanks to this system, the lesser these retired individuals will need to save to attain their target retirement income, while accounting for future inflation.

To earn a return on your savings, you have to loan that money to someone who will then pay you back a higher amount after a period of time (the difference in the amounts is called the interest). Lending and collecting payments is risky and complicated, two things that savers often don't have time or expertise for. That's where finding an intermediary comes in – they can act as a middleman between borrower and lender.

Savers can keep their money in a commercial bank, which is one of the oldest types of financial service providers. A commercial bank collects deposits and gives interest to the depositors. To give that interest, the bank loans money to people or businesses. The loans could be for buying a house, investing money in a business, or meeting payroll needs for a government organisation.

There is another type of intermediation called insurance. In this system, people pay to cover unexpected costs from unfortunate events such as sickness and accidents. Those who want to cover such risks are generally better off buying an insurance policy that pays out in the event of a covered event. The insurance intermediary pools the payments from policy buyers into what is called premiums; the intermediary then assumes the payment of expenses for buyers who get sick or have an accident, and may even invest the premiums to earn an interest.

In sum, providers of financial services direct cash from savers to borrowers whilst also equalising risk. They do this by collecting money from multiple investors, watching over investments made, and managing risk so that it's at an acceptable level for all participants. In a good number of circumstances, the middleman is responsible for both funds and risk. A perfect example of this would be banks that accept the chance that borrowers might not repay creditors, meaning those who deposited their money don't have to worry about such loss.

By issuing loans to a lot of borrowers, lenders are less affected if one or two default on their payments. Insurance companies also spread the financial risk over several policy holders by pooling cash reserves that are then used to pay claimants whose events are covered under their policies. People could handle these services themselves, but it is often more efficient financially to delegate these tasks.

Businesses must also understand the difference between financial goods and services. The financial institution is responsible for how people acquire financial products, or "goods." Each type of product has its own company that creates, markets, and sells it. This separate entity is known as a servicer.

For example, an insurance company sells health insurance and other coverage; banks provide savings accounts, checking accounts, and credit cards; wealth management firms help you purchase stocks, bonds, or mutual funds to make your net worth grow and aid in ensuring a secure retirement.

Components of the Financial Services Industry

These are the financial services available for businesses:

Insurance and Related Services

Insurance is a system where clients or policy holders pay monthly or annually, and in exchange the insurance company pays for the clients' expenses for events covered under their policies. These expenses are often unforeseen and can be difficult to manage without insurance. There are many kinds of insurance, including health, auto, home, renters, and life insurance.

Generally, insurance and related services offer:

• Direct coverage collects premiums from those looking to insure themselves against risk. If a policyholder experiences an event that is covered by their policy, such as a car accident or the sinking of a ship, they will receive compensation from the Direct Insurer.
• Reinsurers, which can be companies or wealthy individuals, agree, for a price, to cover some of the risks assumed by a direct insurer.
• Insurance intermediaries, such as agencies and brokers, match up people looking to pay to cover risk with institutions willing to assume it for a price.

Banking

Banking consists of various segments which include retail banking, commercial banking, and investment banking.

Retail banking, also known as consumer or personal banking, serves individuals rather than corporations; these banks offer financial services tailored to individual consumers. Meanwhile, corporate, commercial or business banking deals exclusively with businesses, regardless of whether they're SMEs or large corporations. An investment bank typically only works with deal makers and high-net-worth individuals – not the general public.

Generally, a bank:

• Accepts deposits and repayable funds and makes loans – providers pay those who give them money, which they in turn lend or invest intending to make a profit on the difference between what they pay depositors and the amount they receive from borrowers.
• Administers payment systems – providers facilitate financial transactions and settlement of accounts between payers and recipients through credit cards, debit cards, and bank drafts, such as checks and electronic funds transfers.
• Participates in trades – capital markets assist companies through buying and selling securities, foreign exchange, and derivatives.
• Issues securities – by issuing bonds or selling shares of businesses, providers assist borrowers by raising the funds they need.
• Manages assets – providers offer advice or invest funds on behalf of clients, who pay for their expertise.

Advisory

This branch of financial services helps both people and organisations with a variety of tasks. Financial advisors are important for more than investment due diligence---they can help assess the value of businesses, guide real estate ventures, and perform other essential tasks. Financial advisory services provide advice on how to manage money and assets efficiently. Financial advisors include certified financial planners, wealth managers, investment advisors, and certified public accountants. In each case, advisors help to guide people in the right direction when making financial decisions.

Generally, financial advisory focus on:

• Investment Management. The team of experts will help you grow your assets and optimise performance to reach your personalised financial goals. They conduct in-depth research on your business, establish tailored objectives, and draft a comprehensive plan to achieve those objectives – all to minimise losses along the way.
• Risk Management. There are many financial risks associated with investing in diverse markets, including both diversifiable and non-diversifiable risks. Non-diversifiable risks are those that affect the entire market; financial advisors develop investment portfolios that minimise the effect of such risks. Meanwhile, investors can avoid diversifiable risks altogether through smart investment strategies.
• Retirement Planning. Investing in your life savings is a significant decision that requires expert guidance. A reliable financial advisory firm will create a personalised plan to protect and grow your assets.
• Estate Planning. Estate planning is a critical part of financial management for any business. The process is complex and requires expert knowledge to execute it effectively. Wealth must be distributed appropriately among beneficiaries, while also ensuring that there is enough left to support their lifestyle. A good financial advisor will secure and protect wealth so that the heirs are financially secure.
• Financial Planning. It makes no sense to earn high returns and pay high taxes. A good financial advisor knows how to allocate funds to save on taxes and avoid losing any more money. Financial planners will help create a financial model in alignment with the business strategy.

Investment Services

People can invest in stocks and bonds through platforms like investment services. The brokers (either human or self-directed online versions) help facilitate the buying and selling of securities, taking a commission for their services. Alternatively, financial advisors charge an annual fee based on assets under management. These assets enable several direct trades to construct and manage a well-diversified portfolio.

Robo-advisors are the newest version of financial advice and portfolio management, providing completely automated algorithmic portfolio allocations and trade executions. Custody services, software vendors, and marketing arms work together to help investment funds trade in the financial markets while collecting management fees. These organisations need client reporting software applications for portfolio management as well as other back-office support services.

Private equity funds, venture capital providers, and angel investors give companies financial backing in return for partial ownership or a portion of the profits. A lot of what happens during large deals is credited to these types of investors.

Tax and Accounting

Staying up-to-date with complex tax laws is difficult for anyone, but a professional can help ensure you're meeting your filing requirements and not overpaying.

Essentially, accountants help people stay on top of their finances and make informed decisions about taxes. This includes making correct payments and being updated with the latest tax law changes. Accountants typically advise companies and individuals on how to lower their taxable income through legal means.

Tax filers, meanwhile, are responsible for preparing and filing tax returns to be submitted to the Inland Revenue Authority of Singapore on behalf of businesses and individuals.

Other Financial Services and Products

Additional financial services and products include:

• Currency Exchange. This is a business where you can trade one type of money for another. They operate both online and offline; you can visit a brick-and-mortar store or bank, or do it all remotely via the internet.
• Wire Transfer Services. These services are a secure way to send money electronically between people or organisations in different locations.
• Debt Resolution Services. If you're struggling to pay your bills or have bad credit, a debt resolution service may be able to help. These companies will negotiate with your creditors on your behalf and try to get you a lower payoff amount.
• Global Payment Providers. These payment service providers allow businesses to take credit and debit card payments from their customers in exchange for a small transaction fee.

Overview of Financial Institutions Regulatory Body

Singapore is a globally renowned financial centre, and for good reasons. Its central location in the Asia Pacific puts it at the center of the world's largest financial institutions. Many of these companies have also chosen Singapore as their global or regional headquarters due to its impressive market conditions and resources.

The Monetary Authority of Singapore (MAS) is the only regulator with oversight of the financial services industry across various sectors. The MAS is also responsible for regulating Singapore's central bank. The MAS regulations cover the following industries:

• banks
• merchant banks
• finance organisations
• securities, futures, and fund management
• financial advisory
• insurance
• business trusts
• money brokerage
• payment and settlement systems
• money-changing and remittance
• trust

The MAS has six key functions it performs to reach its goals:

• Regulation, involving setting risk-based capital and prudential requirements
• Authorisation or acting as the “gatekeeper” for institutions that wish to offer financial services in Singapore
• Enforcement, or taking action against institutions and individuals who breach prudential, anti-money laundering (AML) and countering the financing of terrorism (CFT), or conduct any form of financial crime
• Supervision of the conduct of business by financial institutions, including AML/CFT measures
• Financial surveillance
• Exercise of resolution powers over financial institutions.

The MAS is not the only relevant Singaporean regulator when it comes to business. The Accounting and Corporate Regulatory Authority regulates all businesses in Singapore, while the Singapore Exchange supervises members, monitors market activity and manages listings of entities.

The financial services sectors mentioned earlier are each regulated by different pieces of legislation in Singapore. These include:

• The Banking Act
• The Business Trust Act
• The Finance Companies Act
• The Monetary Authority of Singapore Act
• The Financial Advisers Act
• The Insurance Act
• The Trust Companies Act
• The Securities and Futures Act
• The Payment Systems (Oversight) Act
• The Money-Changing and Remittance Business Act

Subsidiary legislation is created under the respective primary Acts to offer more specific regulations applicable to that particular financial services sector.

Which Financial Services Does Your Business Need?

There is no one-size-fits-all solution when it comes to financial services for small businesses. Every business has different needs and requirements, so it's important to take time to figure out what specific services will work best for you.

While it's impossible to know every requirement you'll have in the future, you can identify the essential services you currently need. A straightforward method is to analyse the types of transactions your business engages with and then assess methods for managing your cash flow.

Customer Payment Options

Consider how you receive payments and the steps that turn receipts into cash.

• Forms of Payment. Does your business accept cash (currency and coin), checks, debit cards, prepaid cards, and credit cards?
• Payment Methods. Do they give you cash in person, at a store, or on-site? Or do they mail checks to a lockbox or pay electronically? You should also consider whether customers enter their payment information into a digital shopping cart or if you have an electronic invoicing system.
• Number of Transactions. Do you sell a lot of small items or fewer big-ticket items? What is your company's average number of sales per month? Is there one busier season where you need to process more sales in less time?
• Average Transaction Amount. Does your business need to put extra security measures in place for large transactions?
• Transaction Process Speed and Frequency. How much time must you wait to receive your money? Are there various steps that you need to take to facilitate customer payments? What are the percentages and/or fixed charges to accept and clear customer payments?

Vendor Payment Management

All businesses have to pay their vendors, but not all businesses know how easy it is to set up an automated payment system. Consider what your business needs to do for payments to be made on time and without error.

• Types of Payments. What types of payment do vendors accept? What special services will you need to facilitate purchases from overseas vendors?
• Schedule of Payments. Do the vendors require payment upfront, or can it be done after businesses acquire financial goods/services? Are there any credit terms available? In other words, if you don't have the money immediately, how long do you have to come up with it? What are the repercussions for not meeting this timeline? Are there discounts available for paying invoices early?
• Spending Limits. Does your business need limits on spending? Or direct approval from a supervisor for certain purchases?

Cash Position and Growth Management

Imagine what your business's ideality would look like when it comes to managing cash, and consider how you can improve upon current scenarios.

• Can you cover your vendor invoices when they're due? Do you buy seasonal products well before you need to sell them? Would it be better to manage cash flow if you combined some of your balances? Is there extra money that could be invested?
• Could your business benefit from automation? If so, consider third-party systems that handle financial and accounting duties (such as invoicing, project management, payroll, or financial reporting) to help manage your cash position.
• If you want your business to grow, you're going to need cash. Whether it's for developing and launching a product line, expanding operations, adding new technology, or reaching new markets, additional funding will always be necessary.

Financial Advisory Requirements

Ideally, you should consult multiple advisers to get different perspectives and recommendations. When you're meeting with an adviser, ask about the following:

• Their qualifications, client base, and specialty areas
• How they'll manage your money
• How often you'll meet
• How they'll consult you on decisions
• What information you'll receive and how often
• How they'll monitor and manage your investments
• What commissions or incentives do they receive from financial products, and how they'll choose products to recommend to you
• Fees and how to end your contract with them (including any penalties or notice periods)
• Who'll look after your account when they're away
• How they'll deal with complaints

A great adviser will help you reach your goals, keep you updated about the state of your finances, and help you grow your money while minimising risks.

Tailored Solutions

Define your business needs, then look for solutions. For example, if you have a low volume of corporate clients and little overhead, a regular account at a large bank might suffice. On the other hand, companies that are engaged in global trade with multiple locations require full analysis or commercial accounts with more comprehensive features such as treasury management, international support, and credit services.

Third-party providers can accept e-checks and manage payroll, but you might also choose to open a basic account with a local bank or credit union. For example, outside companies may agree to take on more complex services that your in-house team doesn't have.

If you think outside the box, you may find that non-traditional sources of financial services better fit your needs. Instead of a business loan, maybe customers can fund equipment purchases or you can use a crowdfunding site for a special project.

The key is to know exactly what you need and then work with providers – both traditional and non-traditional – to craft the right type of financial solution for your business.

If your business needs help with specific financial tasks, check out our list of recommended financial services firms in Singapore.