- Figures from Ken Research show that the industry will continue to be dominant
- Banks are expected to continue to dominate the sector
- “The market is facing an intensified competition and new players are entering the market every year”, the firm said
The remittances market in Singapore has grown and is predicted to be responsible for transactions of more than 11,000m Singaporean dollars in just four years’ time.
A report from research firm Ken Research has found that transaction values in the city-state, which is one of the most powerful in the Asian finance world, are on the rise.
The findings from the report were diverse.
In terms of geographical hubs, Singapore is located on a so-called “corridor” with other major Asian nations including India, China and Malaysia.
The report found that these countries are due to have the most remittance transactions, with them representing 7% of remittances between 2018 and 2023 when worked out using a compound annual growth rate.
The report also looked at the nature of the institutions providing cross-border payments services in Singapore.
It predicted that banks would still be largely responsible for handling remittances even by the end of 2023.
This came despite Singapore also being known for being an accommodating place for start-up companies in the cross-border payments sphere.
It is, for example, home to InstaReM, a firm which is backed by many venture capital companies and which has been funded to the tune of 10s of millions of dollars.
However, it was not all bad news for fintech firms like these.
The report predicted that market share given to banks would still decline overall in the period, and that its growth rate would be in negative figures at -2%.
The report used a comprehensive methodology to work out its findings.
It looked at a wide range of online money transfer providers in the country, including MoneyGram, Western Union, Bank of China Singapore, and many others.
As well as looking at the volume of transactions, it also contextualised its findings by looking at other key metrics such as company performance and the speed with which international transfers into and out of Singapore take place.
In a nod to the growing importance of compliance for this sector, the report also focused in part on the regulatory situation for cross-border payments firms in the city.
In a press release, Ken Research said that mobile would be key in the future.
The coming five years have been poised to be positive for the remittance industry of the country”, it said.
“The market is facing an intensified competition and new players are entering the market every year. To curb the intensity of the competition, both banks and MTOs are focusing on mobile transfers through launching their wallets and applications”, it added.
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