Thursday 12 June 2014

Singapore must stay nimble in rapidly-changing finance industry: Tharman

Rapid changes taking place in finance sector: Tharman
By Mok Fei Fei, The Straits Times, 11 Jun 2014

THE global finance industry is evolving rapidly as fast-changing technology hits customer habits and banking staff levels.

That means the Republic must stay nimble and develop capabilities to ensure the sector continues to provide rewarding careers for Singaporeans, said Deputy Prime Minister Tharman Shanmugaratnam.

Speaking at the Institute of Banking and Finance's (IBF) 40th anniversary dinner last night, Mr Tharman, who is also Finance Minister, said the sector has been buffeted by speedy technological change. This has caused the automation and therefore the redundancies of many jobs, he said at the event held at the Ritz-Carlton hotel.

For example, analysts believe a large proportion of job cuts in the United States' financial sector reflects the ongoing shift from branch to mobile banking. This reduces the need for staff at branches.

Mr Tharman also noted that 74 per cent of global foreign exchange trading is executed electronically, up from single-digit proportions in the early 2000s.

Weak economic growth and higher capital requirements in the wake of the global financial crisis are also forcing financial institutions to review their business models and to restructure, leading to overall shrinkage in the world's financial sector.

"Redundancies have been outpacing new hires by roughly two-to-one. Financial institutions have been particularly pressured to consolidate activities in trading and securitisation, which have higher capital charges," he said.

The good news is that Asian finance is still enlarging its pie and market share, thanks to rising middle-class affluence and wealth creation in the region. "This is a solid story for another two decades at least, with increasing trade flows, rapid urbanisation and infrastructure development," he said.

However, growth of the sector will demand deeper skills, rather than a large expansion of jobs.

Mr Tharman urged his audience: "We must ensure we are well prepared with the skills, depth of expertise and innovative capabilities to stay relevant and competitive." He added that Singapore must proactively develop its Singaporean core while remaining open to foreign professionals with needed specialised experience and skill-sets.

He highlighted the need to develop capabilities in five areas including deep functional expertise which means deepening expertise across all areas including banking, capital markets and insurance.

A second area is achieving cross-functional capability in addition to a core competence in a particular business area. Thirdly, Mr Tharman referred to regional knowledge and experience as being essential as cross-border transactions are now the norm.

He also cited technological skills and adaptability as well as leadership as key areas. "We want to develop Singaporeans for positions of leadership in tomorrow's financial world. It requires both depth and breadth, and will increasingly require both local and global experience and know-how," he said.

To equip local practitioners, Mr Tharman announced that the MAS will be launching a new Asian Financial Leaders Programme later this year for Singaporeans who aspire to take on regional or global leadership positions.

The programme will allow participants to learn from regional policymakers, and interact with fellow financial sector leaders from other nations.

United Overseas Bank's chief executive Wee Ee Cheong, who is also the vice-chairman of the IBF Council, said: "We have a responsibility to ensure that our customers are served by the very best in the industry - people who have the required skill-sets as well as the correct mindsets to help them fulfil their dreams."

Foreign banks stepping up efforts to groom local staff
By Mok Fei Fei, The Straits Times, 11 Jun 2014

FOREIGN banks here say they are committed to developing a Singaporean core, stepping up efforts to groom and keep local talent.

Their comments came as Deputy Prime Minister and chairman of the Monetary Authority of Singapore Tharman Shanmugaratnam said at a banking industry event last night that Singaporeans have to develop skills to prepare for the financial world of tomorrow.

Standard Chartered Bank and UBS said Singaporean staff are core to their operations and they regularly engage highly rated and highly valued local employees.

They do it to find out how employees' career aspirations can be met and to keep them in the company as well as the industry.

At UBS, of the over 2,000 employees in its Singapore office, more than 75 per cent are Singaporeans or permanent residents.

The bank said it has many Singaporean bankers who hold senior regional appointments. Among them are Mr Edmund Koh, the Singapore country head and chief executive of UBS Wealth Management's South-east Asia and Asia Pacific hub; Mr Gan Seow Ann, vice-chairman of the hub; and Ms Yeoh Choo Guan, head of Asean client trading and execution as well as head of Singapore equities.

Mr Koh said: "It is important to nurture more Singaporean bankers for the finance industry here and the region, particularly as Singapore gains greater importance as a global financial centre.

"While UBS' human resource policies continue to be based on meritocracy and the best person for the role, we are committed to recruiting, developing and retaining Singapore talent."

Meanwhile, StanChart engages its staff regularly through feedback sessions and its internal surveys show there is strong demand for tailor-made training and mentorship programmes.

"I joined the bank in 1995 and spent the past 19 years learning from great mentors at different stages of my career," said Mr Gary Tan, its head of financial markets here. "Now I am able to contribute and make a difference by sharing what I have learnt and helping colleagues in the way my mentors helped me in the past."

Singaporeans and PRs make up some 82 per cent of the 10,000- strong staff at Citibank.

Its Singapore country officer Michael Zink said: "Just as we are fully supportive of developing local talent, it is equally important to have some foreign talent with global perspectives, expertise and skills to complement the overall development of Singapore as an international financial hub."

Some Singaporeans believe there is still a bias against locals at some foreign banks. Ms D. Tan, a public relations executive who declined to give her full name, said her husband was passed over for promotion following the appointment of a foreigner as the boss.

Robert Half Singapore managing director Stella Tang noted: "Most of the foreigners employed by banks and financial institutions here are in mid- or top-level roles, where their skills are relatively niche and difficult to find in Singapore."

Fewer new jobs in financial sector
There are still pockets of strong hiring but the new jobs are more complex
By Rachael Boon, The Straits Times, 16 Jun 2014

FEWER new jobs are being created in the financial sector here as banks and other institutions outsource some functions overseas, sharpen their focus on specialised skills and adapt to rapid technological change.

But industry players note that pockets of strong hiring remain in the sector, which has been an important driver of Singapore's economic growth in recent years.

Still, the heyday of jumping from bank to bank with higher salaries that come with each leap may well be over, as banks and other financial institutions become more discerning about whom they hire and more focused on retention of existing staff.

As Deputy Prime Minister Tharman Shanmugaratnam noted at a recent industry event: "Our financial sector has significant opportunities ahead of it. However, growth will demand deeper skills and expertise, rather than a large expansion of jobs."

The jobs being created now are more complex and include roles in portfolio management and investment analysis, product structuring, risk management and technology, noted Mr Tharman, who is also Finance Minister.

Across the financial sector here, jobs growth has decelerated in recent years.

About 5,000 new jobs were created in the sector for each of 2012 and 2013, compared with about 10,000 a year in 2010 and 2011.

Robert Half Singapore managing director Stella Tang noted finance professionals tend to move with more caution now. Banks have also been more selective and more hiring managers are involved in the process.

"They prefer to hire someone with a direct fit and specific technical skills that are non-negotiable," she said, adding that many banks are restructuring now to see where their growth areas are.

One trend hurting job-seekers here is that financial services firms have started to send a number of their mid-office and back-office functions offshore.

Ms Vyon Ng, consulting manager in talent acquisition in Achieve Group, noted that for the past two years, there has been much less hiring for treasury operation roles as many banks outsource this function overseas.

Technology has also proven a major disruptive force, changing the nature of some finance jobs or rendering others redundant.

"The combined effect of offshoring and automation has put pressure on job expansion and we have seen flattening of job growth," said Mr Pathik Gupta, director and head of Asia-Pacific wealth management at McLagan, a management consultancy that works with financial firms.

In the US, the advent of mobile banking and electronic trading has led to significant job cuts in finance. This trend will likely echo around the globe, analysts say.

"What a (bank) branch was used for 20 years ago is completely different today, which means you need different type of people manning branches," noted Mr Mark Young, head of Asia-Pacific financial institutions for ratings agency Fitch Ratings.

Mr Tharman noted in his speech that by some estimates, about 30 to 40 per cent of spot traders are at risk of being replaced as electronic trading becomes more prevalent.

But there are still opportunities in finance for those with the right skills. Human resource players told The Straits Times that risk, compliance and legal talent are now the most sought-after among middle-office roles.

Recruitment also continues for front-office relationship management roles, which could be in corporate banking or wealth management, said Mr Gupta.

At DBS Bank, headcount has been expanded in areas including wealth management and transaction banking as the lender expands in Asia.

It is also increasing talent in fields such as digital banking, said Ms Theresa Phua, managing director and Singapore head of group human resources at the bank.

Banks and financial services firms are also looking for job-seekers with technology skills.

Citi, for instance, is working with universities and software development partners to identify and groom future technologists. It is also hiring graduates as technology associates, said Ms Evangeline Chua, head of human resources for Citi Singapore.

New roles do not always mean more external hiring, however. Banks are keen to retain existing staff and make more investments in them through training.

Ms Jacinta Low, OCBC Bank's head of human resource planning, said that since 2008, more than 25 per cent of the bank's vacancies are filled internally every year on average.

UOB also has comprehensive training programmes to ensure that its staff's technical expertise, such as financial modelling or quantitative analysis, keeps in step with the changing banking environment, said Ms Jenny Wong, its head of human resources.

In general, job-seekers say they are finding it harder to land their ideal roles in Singapore.

Mr Sophian Hardie, 26, who was in customer service in the banking industry for three years and has been looking for a role in crisis management for two months, has noticed that fewer new jobs are being created.

Banks have called him to offer interviews only for specific roles, such as in compliance, and people are now staying in their banking jobs and job-hopping less because of lower job security, he said.

To help train local workers in finance skills, some schemes have ben implemented in Singapore.

For instance, more than 4,000 trainees benefit from the Institute of Banking and Finance Standards Training Scheme each year, the Monetary Authority of Singapore (MAS) told The Straits Times.

The MAS' own Financial Training Scheme benefits more than 18,000 trainees from close to 400 financial institutions yearly.

The Financial Scholarship Programme (FSP), launched by the MAS in 2007, has also awarded 156 scholarships since it started.


- Compliance, legal jobs
- Relationship management
- Portfolio management
- Investment analysis
- Product structuring
- Risk management
- Technology specialists

- Some mid-office and back-office roles
- Some treasury operation roles
- Spot trading

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