Switzerland served as a model for Singapore in the past, but the two have now shifted into a more balanced relationship – especially in the finance industry, Swiss ambassador Thomas Kupfer writes in an exclusive essay for finews.first.

finews.first is a forum for renowned authors specialized on economic and financial topics. The texts are published in both German and English. The publishers of finews.com are responsible for the selection.

The 5,000-strong community of Swiss executives and entrepreneurs in Singapore is the strongest representation of Switzerland in Asia. The city-state is home to more than 400 Swiss firms, many of whom use it as their regional headquarters. It is hard to overstate the city's significance for Switzerland: Singapore is by far our most important trading partner in Southeast Asia.

The city is a linchpin for Swiss finance in particular: Swiss-based banks and insurers employ roughly 8,000 employees, primarily in wealth management. Singapore's financial heart has gained enormously in importance recently, piggybacking on the hot growth of wealth in the wider region. The city is at the forefront of these developments, and has already been able to overtake Hong Kong as Asia's most important center for private banking.

Together with London and New York, Singapore now counts as one of the world's most innovative financial centers, and prepared for the future. The city has stepped out of the shadow of Switzerland to challenge the larger and more established financial center.

«Unlike Switzerland, Singapore rarely conducts long-winded internal debates»

While many see this as a threat, this would be misguided: Singapore and Switzerland complement each other more than they compete with each other. Asian fortunes are more often managed regionally, while Switzerland continues to be an international private banking hub.

Singapore can benefit from Swiss expertise built up over generations, while Switzerland can take advantage of opportunities presented by the city-state's budding fintech scene – the region's leading one. It is a pioneer in regulatory handling of new financial technology and in state-backed initiatives, thanks to the Monetary Authority of Singapore's, or MAS', strong and extensive involvement. 

MAS' role is remarkable: not just a traditional central bank, but also a financial market and regulatory enforcement agency in one. Internationally, MAS enjoys an excellent reputation, as evidenced by deputy Prime Minister Tharman Shanmugaratnam's tenure as head of the International Monetary Fund's governing panel from 2011 until 2015.

Unlike in Switzerland, Singapore rarely conducts long-winded internal financial policy debates. Instead, the city-state decides the general direction after consulting with experts, and rapidly follows through with implementation. The result, among other things, is that Singapore's financial market is highly digitized. This presents a valuable opportunity for Swiss banks to develop and test their own technical know-how.

«Switzerland's central bank has maintained a presence in Singapore since 2013»

MAS enjoys an excellent cooperation with Switzerland's financial officials – the Swiss central bank, regulator Finma and Secretariat for Financial Matters, or SIF – meeting regularly either directly or in a multilateral setting. Switzerland's finance minister Ueli Maurer visited Singapore in April, leading a high-level private and public sector delegation to deepen ties.

Another Swiss delegation will head for Singapore in mid-November for an annual financial dialoque which is meant to synchronize both countries' positions in international and national regulatory reforms. The Swiss National Bank, or SNB, has maintained a presence in Singapore since 2013.

The two countries face similar financial policy challenges, and are pursuing a very similar path in international regulatory matters. Both have been working towards adopting the automatic exchange of information as defined by the Organization for Economic Cooperation and Development, or OECD, since the financial crisis of 2008-09.

«Singapore's digital savvy is very valuable»

To be sure, Switzerland only reached the data-sharing decision after reconciling a torturous domestic debate on banking secrecy. By contrast, Singapore adopted the new guidelines quickly, and has tried to position itself as a financial center of integrity which suffers no fools on money-laundering scandals. In July, the two countries signed an agreement to begin collecting client data next year to exchange with each other.

Singapore and Switzerland have cultivated deep ties in the past 50 years. While Switzerland was long a model for Singapore, the relationship today is far more balanced – and finance is no exception. Well-established financial centers bring considerable institutional knowledge to the table, but the contribution of digital savvy from an upstart like Singapore is equally valuable.

Switzerland and Singapore, both pre-eminent financial centers, are bound by an extremely valuable, dynamic and priveleged relationship that both can take pride in.

Thomas Kupfer has been Switzerland's ambassador to Singapore since 2012. He is a 34-year veteran of the diplomatic corps who has been posted in Washington, Brussels and Rome. From 2000 to 2001, he served as ambassador of humanitarian affairs in Geneva, and subsequently as ambassador in Columbia and in South Korea. The 63-year-old Zurich native studied law in Geneva, where he is a member of the bar association.

This year, Switzerland and Singapore celebrated 50 years of diplomatic relations, during which the two countries cultivated a fruitful cooperation. Today, they enjoy excellent bilateral relations, as witnessed by the regular visits of high-level representatives to each others' countries and the frequent political, economic, academic and cultural exchanges show.

Previous contributions: Rudi Bogni, Peter Kurer, Oliver Berger, Rolf Banz, Dieter Ruloff, Samuel Gerber, Werner Vogt, Walter Wittmann, Alfred Mettler, Peter Hody, Robert Holzach, Craig Murray, David Zollinger, Arthur Bolliger, Beat Kappeler, Chris Rowe, Stefan Gerlach, Marc Lussy, Nuno Fernandes, Richard Egger, Maurice Pedergnana, Marco Bargel, Steve Hanke, Andreas Britt, Urs Schoettli, Ursula Finsterwald, Stefan Kreuzkamp, Oliver Bussmann, Michael Benz, Peter Hody, Albert Steck, Andreas Britt, Martin Dahinden, Thomas Fedier, Alfred Mettler, Brigitte Strebel, Peter Hody, Mirjam Staub-Bisang, Nicolas Roth, Thorsten Polleit, Kim Iskyan, Stephen Dover, Denise Kenyon-Rouvinez, Christian Dreyer, Peter Kurer, Kinan Khadam-Al-Jame, Robert Hemmi, Claude Baumann, Anton Affentranger, Yves Mirabaud, Katharina Bart, Frédéric Papp, Hans-Martin Kraus, Gerard Guerdat, Didier Saint-Georges, Mario Bassi, Stephen Thariyan, Dan Steinbock, Rino Borini, Bert Flossbach, Michael Hasenstab, Guido Schilling, Werner E. Rutsch, Dorte Bech Vizard, Adriano B. Lucatelli, Katharina Bart, Maya Bhandari, Jean Tirole, Hans Jakob Roth, Marco Martinelli, Beat Wittmann, Thomas Sutter, Tom King, and Werner Peyer.