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SINGAPORE'S easiest days as a financial hub are over. The city remains a gateway to Asia, a great base for basing multinationals, settling lawsuits and parking money. But elsewhere, the city is being sidelined; the worry is that is a sign of things to come.
In just 50 years, the tiny city-state has evolved from backwater to world financial centre. Wall Street's top banks all have offices on the ground. General Motors and Procter & Gamble house their regional headquarters there. Korea's National Pension Service has just set up shop.
Singapore's selling points? It is more efficient, stable and less corrupt than its larger neighbours. The World Bank says it is the easiest place in the world to do business. Aggressive tax breaks have helped too.
That backdrop has produced a long list of accolades. It is Asia's largest hub for commodities trading, the biggest for renminbi trading outside Greater China and an important centre for foreign exchange, insurance and infrastructure finance.
Its latest coup is catching up with Hong Kong in international arbitration. Companies increasingly look to Singapore as a neutral venue to settle business disputes. While lawyers fret that Beijing's influence will eventually erode the independence of Hong Kong's judicial system, Singapore has no such worries.
Yet Singapore is finding it harder to stay ahead in areas where its neighbours and rivals prosper.
Take merger advice and securities underwriting. Fees in Singapore for these services fell 18.5 per cent in the first half, more than twice the global average, according to Thomson Reuters; fees in Hong Kong grew 2.7 per cent over the same period.
Banks in Singapore have been hit, both as foreign parents cut back and by lacklustre deal-making in South-east Asia. True, these activities represent just a sliver of the total business of investment banks, but they are among the most high profile.
Flotations are particularly dire. There have also been no new significant stock market listings this year. Companies from other parts of South-east Asia now prefer to list at home.
Increasingly deep pools of domestic liquidity mean companies from bigger countries like the Philippines and Malaysia can often achieve a better valuation on their national exchanges. The market capitalisation of Thailand's SET 50 Index is already more than two-thirds the value of Singapore's equivalent FTSE Straits Times, at US$382 billion. Foreign investors are also increasingly happy to invest directly in these countries.
The worry is that such "on-shoring" will eventually hit other pillars of Singapore's financial centre too.
A thriving wealth-management industry has earned Singapore a reputation as the Switzerland of Asia, but there are challenges ahead. Singapore and Hong Kong are the only two centres in the world where net assets from overseas are still rising, according to Deloitte.
But Singapore's wealth management industry is now growing more slowly than Hong Kong's. The Hong Kong industry has received more money from mainland China and offers a broader range of investments, from equities to art. Meanwhile, the OECD's Common Reporting Standard will make it much harder for individuals to evade taxes by holding money offshore. The rules come into force from 2017.
Singapore's neighbours also want citizens to repatriate wealth. Indonesia, for example, is offering a tax amnesty and estimates its citizens have stashed at least US$226 billion in Singapore.
Companies and financial institutions are also under increasing pressure to hire local talent.
A longer-term uncertainty stems from China's "One Belt, One Road" initiative to build infrastructure across Asia, Africa, the Middle East and Europe. Singapore could benefit, leveraging its strength in project financing and trade to tap new growth. But China may dictate where and how it wants the business around its trade routes to take place, and Singapore could lose out. Same goes for efforts to establish an integrated Asean economic community.
Singapore's weaknesses mostly reflect its size and lack of an economic hinterland. Its challenge now, as always, is to change fast enough. The government is trying to shore up existing strengths such as infrastructure finance, and push into new areas such as financial technology. But it faces fierce competition: everyone wants to be a tech hub nowadays.
The city won't lose its lead overnight. It will take time for neighbours to create markets that are as open and well-regulated as Singapore's. And it will remain, for a long time, the most desirable place to live in South-east Asia for most international financiers and executives. But rarely in the last 50 years has Singapore had so many reasons to question its position as a financial centre.