IT is very important for Singapore's legal sector to be able to cater to the needs of banks and financial institutions as the Republic further develops as one of the top five financial centres in the world.

Law Minister K Shanmugam made this point at Friday's launch of the National University of Singapore's NUS Centre for Banking & Finance Law.

He said that the banking and financial sector is one of the key planks of the Singapore economy - contributing about 12 per cent of the nation's gross domestic product and creating just under 200,000 jobs. The Republic is home to 200 banks and 700 financial institutions.

The minister said: "As issues confronting the financial industry become even more complex and esoteric, it becomes all the more important that the legal community is able to keep itself apprised of the latest developments."

Mr Shanmugam said that with the global regulatory landscape for the financial sector evolving and the expansion of compliance teams in financial institutions, the new centre should aspire to undertake relevant scholarship and applied research.

This would raise the profile and the use of Singapore law for the various financial transactions.

He pointed out that the new centre, besides acting as a convenor for practising lawyers, policymakers and academics from the region, would "contribute to the development of better laws and regulation".

Simon Chesterman, dean of the NUS Faculty of Law, said the idea to have this new centre, among others, was mooted about two years ago.

The centre, as a thought leader, would generate new insights, he added.

"As a platform, the centre will ensure these ideas have an impact beyond the words spoken at conferences or published in academic journals. Its ongoing engagement with the financial community will, we hope, ensure that those ideas have a measurable impact on the development and reform of banking and finance law regionally and globally," said Prof Chesterman.

Over the past five years, Singapore's legal sector has grown significantly, in part due to the need for banking and financial lawyers.

The value of legal services exported has risen 71.5 per cent, from S$363 million in 2008 to S$622 million in 2013. Similarly, the nominal value-add of the legal sector has grown by 40 per cent, from S$1.5 billion in 2008 to S$2.1 billion in 2013.

The Law Ministry will continue to develop initiatives to support law firms to develop international capabilities, said Mr Shanmugam.

One of the areas is dispute resolution and he said the Singapore International Mediation Centre and Singapore International Mediation Institute will be launched later in the year.