Banking and insurance segments drove expansion while fund management lagged amid global market weakness.

Singapore's finance and insurance sector expanded by 4.3% in 2025, moderating from the 7.3% growth recorded in 2024, according to data from the Monetary Authority of Singapore (MAS) cited in the FPA Financial Singapore Financial Services Market View. The moderation follows what MAS Managing Director Chia Der Jiun described as "unusually strong" years for the sector, which grew at more than double the pace of 2023 in the prior year. The 4.3% expansion in financial services came against the backdrop of Singapore's broader GDP growth of 4.3% year-on-year across the first three quarters of 2025, as reported by the ASEAN+3 Macroeconomic Research Office (AMRO).

2025 Growth by the Numbers

The finance and insurance sector's 4.3% growth in 2025 represents a measured deceleration from the 7.3% expansion in 2024, a year that saw the sector more than double the 3.1% growth recorded in 2023. The moderation aligns with MAS's own expectations of slowing growth after an exceptional period. Singapore's overall economy grew 4.3% year-on-year in the first three quarters of 2025, with the financial and insurance sector contributing meaningfully to that performance, according to AMRO's December 2025 Annual Consultation Report. The sector's growth eased after an unusually strong 2024, reflecting a normalization from elevated levels of trading activity and credit intermediation.

Growth Rate (%)Source: Orionmano Industries

Segment Drivers: Banking and Insurance Lead

Growth in 2025 was concentrated in the banking and insurance segments. The banking segment benefited from sustained credit intermediation under accommodative financial conditions, with firm credit growth persisting through the first half of the year. AMRO noted that the financial and insurance sector performed strongly, supported by firm credit growth and elevated trading activities partly due to shifts in global financial market sentiment. The Monetary Authority of Singapore reported that loan growth is projected to remain resilient in early 2026 before moderating later in the year.

The insurance segment contributed significantly, driven by robust performance in life insurance. Auxiliary activities—including payment service providers—also expanded steadily, supported by firm regional consumption and stable payments activity. Singapore's Ministry of Trade and Industry (MTI) confirmed that growth in the finance and insurance sector during the second quarter of 2025 was largely driven by banking activities as well as activities auxiliary to financial activities.

In contrast, the fund management segment saw more subdued activity, reflecting weaker global market conditions. This divergence between banking and insurance on one hand and fund management on the other highlights the sector's uneven performance, with domestic and regional credit demand providing a buffer against weaker global investment sentiment.

Long-Term Trajectory and Policy Context

The sector's recent performance aligns well with long-term policy targets. According to MAS Managing Director Chia Der Jiun, the finance and insurance sector's average growth rate of 4.7% from 2021 to 2024 is "on track" to meet the Financial Services Industry Transformation Map (ITM) 2025 target of 4% to 5% growth between 2021 and 2025. The ITM 2025 target, unveiled by then-Minister for Finance Lawrence Wong in September 2022, set the benchmark for the sector's expansion over the five-year period.

Job creation metrics further underscore the sector's contribution to the broader economy. Between 2021 and 2024, the financial services sector created net jobs averaging 4,400 annually, with more than 90% of these positions going to locals. The ITM 2025 noted that over 3,000 Singaporeans held senior roles in the financial sector as of 2022, representing an increase of more than 80% compared to 2016.

Looking ahead, the MAS expects the finance and insurance sector to remain supported by broadly accommodative macroeconomic and financial conditions in 2026. A low-interest-rate environment is expected to continue supporting credit activity and investment demand. Market Research Singapore projects a compound annual growth rate (CAGR) of 4.0% for the Singapore financial services sector from 2024 to 2029, underscoring the sector's continued importance and resilience, supported by advances in digital banking, fintech innovation, and regulatory support.

Policy initiatives are also expected to provide tailwinds. In February 2025, authorities launched the MAS Equity Market Development Programme, which will invest SGD 5 billion focused on Singapore's equity market to strengthen its role as a source of capital for local and regional firms. AMRO noted that authorities should continue enhancing the attractiveness of the domestic equity market to broaden funding access and strengthen Singapore's position as a regional financial hub.

However, downside risks remain. The potential escalation of geopolitical and trade tensions could disrupt global supply chains, increase costs, and pose challenges for Singapore's highly interconnected and trade-dependent economy. As DBS observed in its 2025 economic outlook, the financial services sector's outlook faces risks from trade tensions, though demand for tech services and ongoing digitalization spending by firms provides a buffer.