Asia’s Rise and the Global Financial Landscape: Is Singapore About to Overtake London and New York?

As Asia continues to rise in prominence over the next few decades and drive the global economy, the question arises: will Singapore overtake London and New York as the world's most prominent financial centre? This article explores the global financial landscape, examining key players and the strengths of various cities in the financial and fintech sectors.

The Past and Present of Financial Capital Hub

Historically, the title of the financial capital has belonged to New York since the 1920s. Despite Brexit, London, often touted as a solid contender in the financial hub race, has never been truly the financial capital. The media in London might promote the idea to help people justify Brexit, but the truth is, the financial capital remains a moniker held by New York and London, with no other city coming close to their level of prominence.

While some papers may claim that London is still first in class, the data disagrees. High competition in the financial sector indicates that London’s position is somewhat precarious. Additionally, despite Singapore's efforts to position itself as a fintech hub, the reality is that it lacks significant financial clout. In the past, Singapore marketed itself as the leading gateway to Southeast Asia for foreign investors, but today, foreign investors can access markets in Indonesia, Malaysia, and Thailand with ease, bypassing Singapore.

Key contenders: Amsterdam and Lisbon

Amsterdam and Lisbon are two other cities that could play a crucial role in shaping the future of the global financial landscape. Amsterdam has a strong reputation in the financial industry and could become a significant player in the fintech sector, especially given the European edition of Money 2020 has relocated to its capital. Lisbon, although currently lacking in necessary potential to outrank London or Amsterdam, could gain significant traction with a sustained focus on appropriate regulation for the fintech ecosystem.

Deloitte’s Rankings and Fintech Hub Analysis

According to Deloitte, which evaluates doing business, financial competitiveness, and innovation, the best cities in the world for fintech are London and Singapore. London has a strong allure for top talent due to its high salaries, good quality of life, easy access to amenities, and a promising fintech environment supported by the Financial Conduct Authority (FCA). It also offers tax incentives and government-backed programs. Singapore, on the other hand, has built a business-friendly environment, ranking top in the Doing Business index from the World Bank. The Monetary Authority of Singapore (MAS) has allocated significant funds to support fintech projects and has created a sandbox for experiments in the fintech arena.

Challenges and Opportunities

Singapore faces challenges in fostering an innovation culture and enhancing access to customers. These issues need to be addressed to maintain its position as a prominent fintech hub. Similarly, London although it faces escalating costs and a loss in attracting foreign startups, maintains several key advantages such as a rich talent pool, strong regulatory and government support, and demographic diversity. London also has a robust fintech policy with backing from the FCA and tax incentives.

Conclusion

The future of the global financial landscape is highly dynamic, with cities like Singapore, Amsterdam, and Lisbon presenting significant opportunities. While Singapore and London remain key players in the fintech sector, the dynamic nature of the industry suggests a high likelihood of other cities emerging as major players. As these cities continue to innovate and compete, the global financial map may undergo significant changes in the coming decades.