THE government is taking a sectoral approach to guide the restructuring of our economy, because the change needs to be pervasive and the characteristics of each sector are different. For financial services,we need to recognise the following when we think of transformation:

First, financial services are connected to every other industry. It supports the growth of other sectors, and what happens in the financial sector has systemic impact across the economy. Second, the financial sector has been continually transforming over the years - from the setting up of the Asian Dollar Market in the 1960s and the liberalisation of the banking, insurance and securities industries in the 1990s, to the extensive regulatory reforms, including Basel III, and the rise of fintech in more recent years. This is a sector not unfamiliar to change. The two big drivers of the financial sector in the years ahead will be macroeconomics and technology.

On the macroeconomic front, Asia's growth will define the economic narrative of our times. Provided the security environment remains stable, and big powers do not turn inwards, this trend will continue. China is confidently marching towards a new historical milestone, to be a prosperous, modern and harmonious society. The South-east Asian economies are progressively integrating their markets. The International Monetary Fund (IMF) estimates that emerging Asia will lead global growth, with an average growth rate of 6.4 per cent per annum for the next five years. The growth will fuel the continued rise of the middle class, growing demand for infrastructure development, and the expansion of Asian enterprises.