Speech by SMS Koh Poh Koon at the ACCA's Global Connect: Professional Services of the Future - Singapore & London

Stephen Shields, Market Director, ACCA

Ms. Natalie Black, Her Majesty’s Trade Commissioner, Asia-Pacific

Distinguished Guests

Ladies and Gentlemen

1. Good morning, it is my pleasure to be here today for the first ACCA Global Connect event. I would like to take this occasion to share my thoughts on the long-standing economic partnership between Singapore and the UK, and the opportunities that lie ahead.

Established trading partners with similar strengths in the Financial and Professional Services sectors

2. Singapore and the UK share a longstanding and robust bilateral economic relationship, with many of our businesses operating in each other’s markets across sectors such as Pharmaceuticals, Consumer Goods and Professional Services. The UK is Singapore’s second largest trading partner for services^[1], and second largest investor^[2] in Europe. Conversely, the UK is Singapore’s largest investment destination^[3] in Europe. There are more than 4,500 British companies based in Singapore, including Rolls-Royce and GlaxoSmithKline, and over 40,000 Britons reside here, forming the largest overseas British community in ASEAN.

3. Singapore and the UK have also both built a strong base of expertise in the Financial and Professional Services sectors. UK is one of the world’s top legal centres, with the second largest legal market globally. It is also home to a robust Financial Services sector, which contributed £119 billion and 1.1 million jobs^[4] to the UK economy in 2017. In Singapore, Financial, ICT and Professional services^[5] make up ~30% of our GDP, and they have been identified as key sectors of our economy.

Singapore as a gateway to ASEAN

4. Singapore, like many other countries, is watching the developments on Brexit closely and hoping for the UK to continue to stay plugged into the global economy regardless of the outcome of Brexit. In addition, given our similar expertise in the Financial and Professional Services sectors, we look forward to continue working with the UK in accessing the growth opportunities for these sectors in ASEAN. Singapore could be UK’s gateway to the region.

5. ASEAN is seeing a rising demand for business services. The region’s GDP is expected to grow at 5% annually, and become the fourth largest economy globally by 2030. To seize these growth opportunities, ASEAN companies and foreign MNCs are steadily expanding their operations here and will in turn require more legal, accounting, marketing and financial advisory services. This presents significant growth opportunities for UK firms in the Financial and Professional Services sectors that are looking to expand beyond Europe.

6. Our top Singapore Law Practices are amongst the largest law firms in ASEAN. Rajah and Tann in fact has the largest law firm network in ASEAN that spans nine ASEAN countries and China with over 500 lawyers. UK firms seeking to access opportunities in the region could partner Singapore firms to accelerate regional scale-up.

a. One example is British law firm Eversheds, who merged with Singapore law firm Harry Elias Partnership in 2017. This allowed them to tap on Harry Elias’ existing networks in the region, including its offices in Brunei Darussalam.

b. British headquartered law firm Withers entered into a Formal Law Alliance with Singapore-based law firm KhattarWong in 2015, which allowed them to service the Malaysian, Indonesian and Indian markets through Singapore.

This collaboration was so successful that in January 2019, Withers and KhattarWong opted to fully integrate their operations and practice as one entity.

7. In the Financial Services sector, Singapore is the preferred Regional HQ base for many bulge bracket banks; we are also a choice location for Centres of Excellence (CoEs) in areas like Merger & Acquisition, capital financing and risk management.
 
a. For example, HSBC maintains an extensive presence in Singapore, which is one of its core markets and functions as an entry point to ASEAN for the bank. HSBC Singapore has a headcount of 3,000 and assets of S$86 billion, and has plans to hire additional 300 staff in retail, commercial, private banking and innovation businesses by 2020. 

In addition, HSBC established a fintech innovation lab in Singapore in 2015 which focuses on the use of AI to improve business efficiencies.

b. Meanwhile, Barclays has a headcount of about 1,300 and assets of S$8.6 billion in Singapore, which is one of its four Asian hubs alongside Tokyo, Mumbai and Hong Kong. Following the company’s global restructuring, Barclays has started to grow its Singapore franchise as the Asia Pacific hub for the global markets business.

8. The Big 4 advisory firms^[6] have also used Singapore as their location for regional capability hubs and CoEs.

a. PwC has set up several CoEs in Singapore over the years to develop solutions for Asia-Pacific and ASEAN, such as the (i) PwC Growth Markets Centre, which develops breakthrough insights on building effective growth operating models in emerging markets to help businesses succeed; and the (ii) PwC Venture Hub, which is the world’s first one-stop shop for investors and entrepreneurs looking to navigate start-up ecosystems.

b. Deloitte launched the Future of Work CoE in Singapore in 2018, a first-of-its-kind platform to create solutions that anticipate market disruptions, address the skills mismatch challenge, and identify future job requirements.

9. These are but some examples of UK firms which have established a presence in Singapore to access opportunities in the region, and encourage more to do so.

Opportunities for greater partnership

10. Beyond being a gateway to the region, given that both our countries have built a strong base of expertise in the Financial Services and Professional Services sectors, there is room for even closer partnership to transform our finance functions amidst the digital disruption brought about by rapid technological advancements.

11. Singapore is one of the best digitally connected countries in the world; we are 2nd place in the global ranking of digital competitiveness by Swiss business school IMD. We have a strong local ecosystem in digital innovation, established R&D expertise within our IHLs, and are regional homes to tech giants like Google, Facebook and LinkedIn. All this makes Singapore a good testing bed to develop innovative solutions for the region and beyond.

12. Later this year, we will be launching our Industry Digital Plan for Accountancy, which aims to support accounting firms on their digital transformation journey, particularly in the development of new products and protoyping of new solutions to foster innovation and improve productivity.

13. We welcome UK accounting technology and solutions players to set up regional HQs in Singapore to reach out to the ASEAN market and collaborate with our local SMPs, IHLs or other technology players based in Singapore.

Conclusion

14. Singapore continues to welcome the flow of professional accounting, legal and financial services; as well as investments to create networks and conduits for these flows.

15. We believe exponential synergies will arise when leading financial centres like Singapore and London connect.

16. I wish you an exciting and insightful day ahead.

[1] Bilateral trade in services valued at close to £10 billion in 2017

[2] Stock of Foreign Direct Investment (FDI) in 2017 close to £48 billion

[3] Stock of Direct Investment Abroad (DIA) in 2017 over £28 billion

[4] This makes up about 6.5% of total economic output and 3.2% of all jobs respectively.

[5] This consists of legal, accounting, consulting, architecture & engineering, advertising and design professions.

[6] The “Big 4” refers to the four key players in the accounting industry, and include Deloitte, PwC, EY and KPMG.