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Singapore’s fintech future in 2020 and beyond
In 2017, nearly half of the world’s digital payments were made in Mainland China, thanks to apps like AliPay and WeChat being so prevalent in the country. With the transactional value’s CAGR projected to hit 19.2% between now and 2024, fintech is clearly set to be big business in that part of the world. With that said, China is not the only one experiencing a fintech revolution. Down south in Singapore, excitement is brewing in the local fintech space in 2020 and beyond as well.
As of today, there are more than 600 fintech companies currently operating in the city state, including global players and local start-ups alike. Large banks and other financial services firms continue to invest heavily in fintech, and they are all competing to stay ahead of the curve.
In order to further cement its position in the fintech space, the Bank of International Settlements recently announced plans to set up an innovation centre in Singapore. The purpose is to ‘observe critical technology trends affecting central banking globally’. Furthermore, earlier this year, Singapore’s central bank pledged an offering of up to five digital bank licences. Virtual banking, it seems, will become the next frontier in Singapore’s banking liberalisation. On the employment front, this could potentially translate to job creations, specifically in specialised fields like big data, software engineering, cloud computing, as well as information security spaces.
Speaking of jobs being created, we recently conducted a comprehensive survey, titled Hiring in Fintech, with clients and candidates to find out some of the key sentiments when it comes to Singapore’s fintech scene. The following are some of our key findings.
A shortfall in talent (and experience)
By now, most agree that fintech is going to be a positive force of change — and according to our survey, 94% of respondents agree with that sentiment. While the enthusiasm for fintech is certainly high, the same number of financial institutions we spoke to also said that Singapore faces a talent shortage in the fintech space.
There are many reasons to account for the mismatch between demand and supply. Firstly, despite the forward-thinking government and its policies, Singapore has taken too long to adopt certain emerging technologies. As such, professionals here tend to lack the exposure and academic training for emerging technologies or banking operations.
Secondly, our survey found that a key talent recruitment challenge is that of experience shortfall. Even though 63% of fintech employers surveyed would prefer domestically cultivated talent, 40% of them still feel that there is a shortage of talent with proven skills. Perhaps that explains why, when it comes to recruitment, about 22% of them still prefer to hire foreigners. The plug-and-play nature of foreign fintech talent, especially for technical fitment, is still an attractive proposition to employers to say the least.
Just having the technical skills are not quite enough, at least for fintech employers in Singapore. While most respondents cite technological knowledge as being very important (58%), soft skills — like strong business sense (45%) and innovation ability (39%) — are equally critical also. These requirements are part of the reason why, even though talent might showcase good technical know-how on paper, they are still relatively hard to come by.
Meanwhile, Rupert Forster, the Managing Director of Page Executive in Mainland China, offered a slightly different perspective. When asked about talent shortage in Mainland China’s fintech industry, Forster said that a successful company has to be able to cultivate talent from within. “The demand-supply shortfall is not unique to the fintech industry,” he said. “Many sectors are faced with the same manpower issues. In China, where things are developing at a breakneck speed, this is especially the case. That is why the best way to counter the talent crunch is to look at the talent you already have.”
The candidate’s perspective
But how does the fintech industry look like from the candidate’s point of view? First of all, aside from talent shortage, Singapore’s fintech scene has a high turnover rate as well. Numbers from our survey reveal that nearly 40% of respondents have changed jobs within the last 12 months. The number is similar if you zero in on the 25–35 age group, where 36% of fintech talent have changed jobs within the last 12 months.
One of the top reasons for candidates to change jobs might be that of salary. About 20% of respondents claimed salary as one of the main push factors, and that they generally expect about 12–15% in salary increment when changing jobs.
Money, however, is not the sole factor when choosing employers. Singaporean talent in the field are looking at benefits too. Some of the most sought-after ones include flexible working hours (63%), additional training and development (57%), as well as leadership opportunities (56%). In terms of the employer, candidates especially look out for a good culture fit, a viable career path, as well as good technological capabilities.
With Singapore currently in the early stages of a fintech boom, it is more important than ever for employers to offer attractive packages to attract and retain the very best talent in the industry. “Businesses need to attract and upskill key talent in Singapore’s tight labour market,” Nilay Khandelwal, Managing Director of Michael Page Singapore, added. “Singapore also needs to nurture and produce top quality industry-ready talent through education to ensure that it has the capabilities to continue to grow its fintech industry.”