PESTLE Analysis on Singapore's Banking Industry
Discussion and Evaluation
Singapore is a small country in South East Asia with no natural resources and limited population. However, the banking industry of Singapore is one of the leading players globally. This report aims to find out what are the factors that can make the banking industry thrive. A PESTLE analysis would be provided from the viewpoint of a bank in Singapore. This is to make it more realistic as its aim is to give an overview sight on the business environment in Singapore to find out if there are any risks, threats and to minimise them. Not forgetting the opportunities that can capitalise on. The objective of the PESTLE analysis is to have a foresight of the external environment that could impact the internal business environment and implement necessary measures. PESTLE Analysis on Singapore's Banking Industry
With a strong advanced technological infrastructure, banks in Singapore can tap on technology to their advantage both internally and externally. Internally, it means the bank processes are highly effective and efficient also cutting down on costs. This is done by having the right software systems implemented, for example knowledge management software systems that spread across the many departments and upper management of the bank. When properly managed, the bank can reap huge benefits such as sharing vital information to help make decisive decisions on time and cut unnecessary costs down. For external, the services the banks provide such as the automated teller machine (ATM) and internet banking have changed the scene of the business environment. From traditional walk in branches, customers of banks can now utilise its services 24 hours a day and 7 days a week, no longer restricted to the geographical location and opening hours of a bank's branch. Both internal and external benefits enjoyed by the banks derived from advanced technological infrastructure provided in Singapore. To add testament to the fact, Singapore was ranked #2 globally for World Class Technological Infrastructure in 2013 by the 'Global Technology Report' [World Economic Forum, 2013]
To explain what the political landscape of the banking industry in Singapore, it means to what extend does the Government controls the economy tariffs , Labour Law, Environmental Law, Trade Restrictions, and Tax Policy. All of these political factors implemented by the government affect the banking industry indirectly or directly and banks have to adhere to the rules and regulations set by the government whether if it is for good or bad consequences.
It would be too technical to go into those details and we would look at an overview on Singapore's government, on whether it is beneficial to the banking industry or is a hindrance to it. In terms of the political scene in Singapore, there are few political turbulence and negative images this is due to the efficient and transparent government. The government is also ranked 2nd in the world for 'Global Competiveness Report for year 2012-2013 [World Economic Forum, 2013].
Basically, the ranking is based on a comprehensive list of criteria such as corruption, tax rates, trades, foreign exchange controls etc. By being ranked the 2nd, it says much about the government stability, its taxation policy and trade policy.
To link some of these points back to the banking industry, the government has attractive corporate tax rates of 17% where banks will receive a 30% corporate income tax rebate per year. And the government was ranked as 5th least corrupt in the IMD World Competiveness Report from 2009. Overall, all these figures mean that there is less tax regimes and investors are not subjected to capital tax gains, dividend tax and foreign exchange controls. These...
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