Payment service providers led the segment's expansion as regional consumption and stable transaction volumes buoyed growth.

Auxiliary Segment Outpaced Banking in 2025

Singapore's auxiliary financial services segment—comprising largely payment service providers—expanded by 5.0% in 2025, according to FPA Financial's February 2026 market review. This growth rate matched the 5.1% recorded by the fund management segment and exceeded the 4.4% expansion of the banking sub-sector over the same period. Within the broader banking category, loans to residents rose 6.1% year-on-year, driven by a turnaround in lending to the manufacturing sector, while loans to non-residents increased 3.4%, supported by stronger lending to the Americas.

The auxiliary segment's performance reflects a shift in the composition of financial services growth in Singapore. While banking has long been the dominant contributor to the sector's value-add, auxiliary activities—dominated by payment firms and fintech intermediaries—are becoming an increasingly significant growth engine. The 5.0% growth figure positions auxiliary services as one of the best-performing sub-sectors within Singapore's financial ecosystem in 2025.

Annual growth (%)Source: Orionmano Industries

Payment Providers Drive Expansion

The auxiliary segment's growth in 2025 was "led mainly by payment players, which benefited from higher spending in the region," FPA Financial reported. Stable payments activity also contributed to the segment's performance, underpinned by Singapore's position as a regional payments hub and the continued digitization of transaction infrastructure.

Multiple structural tailwinds support the payment segment's trajectory. The Monetary Authority of Singapore's Financial Services Industry Transformation Map (ITM) 2025 has prioritized digitalizing financial infrastructure and harnessing technology to develop new business models and enhance operational efficiencies. Digitalization and the growing adoption of AI tools are enhancing the sector's capabilities, according to FPA Financial, while fintech innovation and regulatory support remain key drivers of long-term growth.

Singapore's payment ecosystem has benefited from the broader regional consumption environment. Trade and services flows across Southeast Asia remained robust in 2025, supporting transaction volumes for payment providers that facilitate cross-border commerce and digital payments. The city-state's role as a regional clearing and settlement hub has further cemented demand for auxiliary financial services.

Broader Financial Sector Growth and Medium-Term Outlook

The auxiliary segment's performance sits within a broader financial services sector that showed resilience in 2025. Singapore's Finance & Insurance sector—a GDP measure that captures financial services broadly—grew 5.0% in 2025, according to the Economic Survey of Singapore 2025. This was marginally below the 5.8% expansion recorded by services-producing industries as a whole but in line with overall GDP growth.

Looking at the financial sector more narrowly, the Monetary Authority of Singapore reported that the financial services sector grew 6.8% in 2024, though Managing Director Chia Der Jiun noted in a July 2025 media briefing that this pace was "unusually strong" and that growth should moderate in the coming years. The sector's average growth rate of 4.7% from 2021 to 2024 is "on track" to meet the Financial Services ITM 2025 target of 4% to 5% annual value-added growth, Chia stated.

Assets under management in Singapore reached SGD 6.07 trillion in 2024, up 12% year-on-year, according to MAS data cited by Yahoo Finance. This underscores the wealth management and fund management segments' ongoing expansion, even as the auxiliary activities segment continues to carve out an increasingly significant role in the sector's growth composition.

FPA Financial projects that Singapore's financial services sector will grow at a compound annual growth rate (CAGR) of 4.0% from 2024 to 2029. "This projected growth underscores the sector’s continued importance and resilience, supported by advances in digital banking, fintech innovation, and regulatory support," the report noted. The auxiliary segment is expected to expand at a steady pace, supported by firm regional consumption and stable payments activity.

However, the outlook is not without headwinds. FPA Financial notes that loan growth in Singapore is expected to remain resilient in early 2026 before moderating later in the year, "reflecting a more cautious economic outlook." The MAS anticipates that loan growth will stay resilient before moderating as the year progresses, partly due to expectations that the U.S. Federal Reserve will hold rates steady. A low-interest-rate environment should encourage borrowing and sustain loan demand in the near term.

Beyond cyclical drivers, structural forces continue to strengthen Singapore's role as a global financial hub. DBS Bank's Singapore 2040 report projects that finance could rise to 15% of Singapore's nominal gross value-added by 2025-2040, up from 13.8% in 2020-2024. Bloomberg Intelligence forecasts that Singapore's GDP growth will ease to 2.5% in 2026 after a 5% expansion in 2025 driven by AI-led investment, with long-term growth settling at 2-3% in most years.

For the auxiliary financial services segment, the medium-term trajectory appears positive but measured. Payment digitization, AI adoption, and regulatory support will continue to provide structural support. However, as the broader financial services sector matures and the global economic outlook becomes more cautious, the segment's growth rates are likely to moderate from 2025's pace, reflecting the sector's natural maturation cycle.