Backing start-ups crucial for Singapore’s innovation push, despite higher risks: HSBC chief

SINGAPORE - Start-ups are key drivers of innovation, and ensuring they have adequate banking and financing support from early stage to scale-up is critical for any economy.

For Singapore to cement its position as a global innovation hub, it is especially crucial for banks to play their part in supporting the companies that will shape the future economy, even though lending to start-ups carries higher risks than lending to mature firms.

These are the views of HSBC group chief executive Georges Elhedery, who spoke to The Straits Times during a recent trip to Singapore.

The Republic, a global innovation hub, plays an important role in HSBC’s global strategy, and as the bank expands in the Asia-Pacific region.

“There are great innovation start-ups in Singapore. There’s a venture capital appetite in Singapore. Being able to leverage and bring all our expertise to bear in this ecosystem is paramount, and that’s another major development area for us.”

Speaking to ST at the HSBC office at Marina Bay Financial Centre, Mr Elhedery said that much of the gross domestic product growth in major economies, including the US, is now driven by innovation, technology and artificial intelligence (AI).

For example, while advanced technology represents only 4 per cent of the US’ GDP, it accounts for 92 per cent of GDP growth, he said.

“This trend is mirrored in Singapore, making our participation in the innovation ecosystem critical for building the businesses of the future. Their (start-up) contributions are going to be critical for the growth of economies, and it’s going to be no different for Singapore.”

Singapore’s performance in global benchmarks further illustrates this trend.

The Republic

climbed to fourth place in a global start-up ecosystem ranking in 2025

, up from fifth in 2024, driven by strong performance in areas such as investor presence, access to start-up opportunities, concentration of global tech leaders and corporates, as well as the depth of local talent.

According to the 2025 Global Startup Ecosystem Index by research platform StartupBlink, Singapore ranked behind Israel, Britain and the US.

The index, which evaluated the start-up ecosystems of 118 countries, highlighted Singapore’s strategic focus on deep tech and key growth industries such as fintech, foodtech, AI and advanced manufacturing.

More start-ups expanding abroad

Many Singapore start-ups now aim to scale internationally, and HSBC said it is seeing strong interest from clients attracted by the bank’s global network.

In October, the bank launched its innovation banking services in Singapore to support venture-backed businesses and their investors, offering sector expertise, specialised products, tailored financing solutions and access to new opportunities through HSBC’s global network.

The bank also pledged US$1.5 billion (S$1.94 billion) in funding in the Republic, targeting high-growth companies.

Many start-ups need loans to get off the ground, and even more so when they expand overseas. But banks are often absent from this stage, as they tend to be reluctant to lend to start-ups given their higher credit risk.

To manage these risks, HSBC draws on its deep sector expertise and close engagement with start-ups and their investors. Beyond banking early-stage companies, the bank also serves the wider innovation ecosystem, including their investors.

“Our involvement with start-ups, their investors and the broader ecosystem gives us insights into their needs and challenges. This expertise allows us to navigate the risks thoughtfully while maintaining growth ambitions,” Mr Elhedery said.

“It gives us a better sense of where lending needs to go, what the next needs are, what the next challenges are, and how their investors see the opportunities and the challenges,” he added.

HSBC’s focus on the innovation economy accelerated after the bank in March 2023 acquired the UK arm of Silicon Valley Bank (SVB) for a nominal £1 ($1.72), with the British government and the Bank of England facilitating the sale. The acquisition helped to stabilise SVB UK from the collapse of SVB’s US parent company.

HSBC is also actively engaging clients and partners to explore how

a new Singapore Exchange-Nasdaq dual-listing option

announced by the Monetary Authority of Singapore on Nov 19 can be integrated into clients’ strategic plans.

Through its innovation banking teams in Singapore and the US, the bank helps clients navigate the implications of dual-listing, offering guidance on regulatory requirements, market dynamics and potential business impacts.

Working with entrepreneurs

HSBC’s push into innovation banking also supports its wider aim of helping founders manage both their business and personal wealth.

The bank is supporting entrepreneurs through a range of services, including global private banking for personalised wealth planning. Currently, close to two-thirds of the bank’s global private banking clients in Singapore are entrepreneurs.

Other offerings include advisory sessions guiding founders through pre-exit, initial public offerings and succession planning, as well as networking opportunities through programmes like the “Innovation Exchange”.

A 2025 global entrepreneurial wealth report by HSBC found that Singapore ranks as the world’s most attractive hub for entrepreneurs, with 15 per cent planning to move their wealth here and 12 per cent considering personal relocation – a sign of strong confidence in its stability, connectivity and innovation ecosystem.

Wealth management is a major growth area for HSBC in Singapore, recording double-digit growth in assets under management and revenue for several quarters.

In the last two years, the bank also launched three wealth centres here and expanded its team of relationship managers to support wealth clients. The centres cater to clients across the wealth continuum, from the mass market to ultra-high-net-worth customer segments.

Mr Elhedery said: “Through multiple channels, we’re acquiring wealth clients, including international customers, new residents in Singapore and corporate clients seeking personal banking services.”

Singapore is also a key technology and innovation hub for HSBC to build capabilities in areas such as quantum computing, AI and blockchain.

HSBC in September set up a Quantum Centre of Excellence here to explore how emerging quantum technologies can be applied to financial services.

The centre will first focus on quantum-safe security – such as post-quantum cryptography and quantum key distribution – to safeguard critical infrastructure against future quantum attacks, and will work with regulators, researchers and fintech firms to test interoperability, standards and use cases.

The push comes as experts warn that powerful quantum computers could eventually break today’s encryption systems, prompting regulators and banks to move early on defences. Beyond cyber security, the centre will also study how quantum computing can enhance financial modelling, optimisation and machine learning.

HSBC has also rolled out a blockchain-based tokenised deposit service in Singapore that supports 24/7 real-time instant settlement. It has since completed US dollar cross-border transactions between Hong Kong and Singapore for Ant International.

“We’re building capabilities here for the group. Singapore is highly critical in HSBC’s global strategy,” Mr Elhedery said.

“Our ambition in Singapore is to be the No. 1 international bank across corporate and institutional banking, as well as wealth management and innovation banking.”