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No more laughing their way to the bank

With the financial sector in the throes of transformation, bankers face the reality that their jobs can never be the same again

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Deutsche Bank announced in July that it was scrapping 18,000 jobs globally and axing its global equities business and some of its fixed income operations.

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DBS Bank received 7,000-9,000 applications from fresh graduates for its various programmes in Singapore for 2018 and 2019, up from the typical 4,000-5,000 in previous years.

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The financial services sector in Singapore is far from shrinking - financial and insurance services actually grew by about 6 per cent in 2018 - and it is expected to add 4,000 jobs this year.

When Lim Cheng Kee, 49, was laid off from her risk and compliance job at Deutsche Bank in August 2018 after more than 10 years in the industry, it was a blow that she did not see coming. Hers was one of the more than 7,000 roles that the German lender had cut worldwide. "Hiring and firing seems quite common in the banking world but I just didn't expect it to happen to me so fast," she tells The Business Times. "I knew that roles like operations, back office and IT jobs are being outsourced to lower-cost countries, but I didn't think that risk and compliance would be on the chopping block."

She was part of the global team and looked after the Asia Pacific region, talking to internal stakeholders and conducting records risk assessments to evaluate if they meet regulatory requirements, as well as implementing a risk and compliance framework.

Describing her previous role as particularly niche, she believes that is partly why she has not managed to secure a job since then. It is not a case of being picky: "I am open to all industries and have applied for risk and compliance roles, including financial compliance," she says.

More than one year on, Ms Lim is still taking on temp jobs such as book keeping - she is a trained accountant - and being a receptionist to keep busy.

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"No such thing as job security"

Her tale is one that is not uncommon in the global financial industry, where it is widely known that the sector's relatively high pay is a trade-off for a lack of job security.

Adrian Choo, founder and CEO of Career Agility International, explains: "In today's world, let's face it - there is no such thing as job security. But this is especially so in banks.

"The banking landscape is evolving so fast - it's not that they are retrenching left, right and centre. They are evolving, reshaping themselves… while they may be cutting back in some areas like branches, they are hiring like crazy on the digital and tech side of things."

In the past few years, he has observed more bankers - retrenched or not - coming to him for help as they feel that their careers might be in jeopardy. In fact, more than one-third of his clientele comes from the financial sector.

Lim Chai Leng, director, banking & financial services, Randstad Singapore, concurs with this phenomenon.

Digital transformation is a source of worry for those in the industry, with many banking professionals concerned that a big part of their job scope will be replaced by technology in the near future, she says.

"We have received increased queries from banking professionals who want to know about the types of jobs available in the market and what are some opportunities outside of the banking industry that they can consider moving to."

Banks in Singapore may not be the worst hit compared with their counterparts around the world, but they are certainly not exempt from wider afflictions faced by the industry at large.

Be it a sudden change in strategic direction by the leadership, competition from fintechs, or the breakneck pace of digital transformation rendering jobs redundant, it is clear that many areas of banking are becoming obsolete.

In some cases, this happens faster than it takes for workers to be retrained to take on new roles in growth areas.

This year, job cuts by banks are approaching 60,000, with many of them being shed by European lenders, which are struggling amid negative interest rates and a slowing economy. The latest among them is said to be HSBC, which is looking to cut 10,000 jobs globally.

Deutsche Bank announced in July that it was scrapping 18,000 jobs worldwide and axing its global equities business and some of its fixed income operations. Other global names shrinking their teams include Barclays and Citigroup.

Asian banks have not been spared either. Japan's largest lender, Mitsubishi UFJ Financial Group (MUFG), is cutting half its Asian investment banking workforce outside its home country, making redundant abut 60 MUFG Securities staff in Hong Kong, Singapore and Sydney.

It's been a brutal year for banks around the world. However, global banks that are cutting back elsewhere still say they remain committed to Singapore and viewing it as a growth market.

HSBC, for example, has seen a string of high-profile senior hires in Singapore in the past few months despite its woes on the group-level. It also maintained that its plans to hire remain on track here.

The financial services sector in Singapore is far from shrinking. Financial and insurance services actually grew about 6 per cent in 2018 - one of the key drivers of the Republic's growth and outpacing that of the overall economy, which expanded by 3.1 per cent.

It makes up about 12 per cent of the overall Singapore economy, employing about 160,000 workers, or 4.5 per cent of the workforce.

Not only is it among the sectors contributing the most to employment growth, it is also expected to add about 4,000 jobs this year even as the Singapore economy eases.

But these figures also include fintech players here, which are gradually muscling in on banks' traditional turf. There are now more than 500 fintechs in Singapore eager to revolutionise the future of finance and potentially give incumbent banks a run for their money.

What do millennials want?

Much has changed in the financial sector since the Great Financial Crisis of 2008. Chief among the changes is the fact that the eye-popping banker bonuses have gone down considerably and the reality that banks are, in fact, not too big to fail. And as millennials begin to prioritise meaningful work over money, it seems like a career at big banks may not be the number one choice that it was before.

Arturo Bris, professor of finance at IMD Business School in Switzerland and Singapore, says: "The new generation of business graduates is looking for self-fulfilment at the expense of a promising financial career."

Up to 10 years ago, they would go after large, established, highly reputed financial institutions, he points out. But things are different now.

The rise of technology companies and fintech firms is now giving banks a run for their money, according to Prof Bris. They are often viewed as more dynamic and innovative - places where they feel that they can make a difference, and not just be a cog in the wheel.

Quality of life is another factor that workers look at, and the life of a "traditional banker" - with its brutal hours and single-minded focus on the topline - is a lot less appealing for young people, he adds.

Despite millennials' changing priorities elsewhere in the world, the lure of banking jobs - in Singapore, at least - is still very strong, as they still rank among some of the best-paid jobs, in a highly progressive sector with some banks here resembling tech firms instead of traditional brick and mortar lenders.

Singapore remains a thriving finance hub, with many banks setting up their headquarters here to leverage opportunities in the Asean region, which is seen as the next growth hotspot. The upcoming digital banks here are also an indication of the sector's progress.

Growing interest among fresh graduates

Current bankers may be jittery about their future prospects, but interest from students remains high. Fresh numbers from Singapore's Big Three - DBS, OCBC and UOB - revealed that the volume of applicants for the fresh graduate programmes has been growing, as the international prestige of the local banks grow.

According to DBS group head of talent acquisition Susan Cheong, the bank used to typically receive between 4,000-5,000 applications from fresh graduates for its various programmes in Singapore. For 2018 and 2019, however, the number spiked to 7,000-9,000.

DBS attributed this to improved employer branding as a result of winning international awards such as World's Best Bank by Euromoney and Best Employer in Singapore by Aon. The number of candidates hired remained between 120-140 in the last five years.

Meanwhile, OCBC saw the number of applications for its Graduate Talent Programme go up from 4,000 in 2018 to 5,000 this year, with 60-80 positions filled in Singapore.

UOB saw its number of Management Association programme applicants go up from 25,000 last year to 35,000 across Asean vying for about 40-50 spots in the region.

Michael Nette, managing director of recruitment specialist Ambition Singapore, observes: "This comes on the back of the local banks going through a recent culture shift. "They have focused more on diversity and inclusion initiatives and have also hired international talent into a few key areas, and this has aided change."

Candidates are also drawn to the allure of working at the banks' global headquarters, with the opportunity to make a bigger impact, he adds.

He notes: "Overall, candidates in Singapore are more cautious about joining global banks, specifically due to the restructuring and offshoring that has been taking place."

The growing spotlight on local banks takes place at the same time as some global banks - especially the US and European lenders - slow down hiring activities in Asia Pacific as they prioritise their operations back home, say HR consultants.

DBS' Ms Cheong believes that it is the local banks' commitment to Singapore that also draws job seekers.

"The question for the foreign banks is if they will withdraw if the economy turns," she says. "But for us, the three local banks, this is homeground. We are anchored here."

This can be seen in their investment in their people. It is the local banks' efforts to retrain and reskill staff to cope with disruptions that helps them stand out from the rest, observes Eliezer Neo, director of banking, financial services and insurance, RGF Executive Search Singapore.

"Working in the banking industry is no longer all about making the most money in the shortest among of time," he says. "Employees want stability and room for progression."

DBS, for example, realised early on that branches and call centres could be affected. This led the bank to embark on training programmes that enabled these staff to be retrained to take on new roles such as "digital evangelists" (they encourage customers to use digital platforms), minimising job losses even as the industry continues to change at breakneck pace.

What's next?

With the industry in the throes of transformation, the writing is on the wall for some areas in banking.

Aside from branch or call centre jobs, Mr Nette says that any process-driven role is either being "automated or outsourced".

"Traditional roles such as settlements and back office support functions are most at risk in the face of automation," says Randstad's Ms Lim.

Financial firms are also outsourcing parts of their internal processes to emerging markets such as India and the Philippines, or to business process outsourcing companies to generate cost savings, she says.

On the flipside, recruiters are all in agreement that tech talent in areas such as software development, robotics and big data analytics are in demand. So are jobs in compliance and risk.

Front-office roles are also growing significantly, with rising demand for relationship managers to drive new business.

"It is a supply-short market for private bankers and with the growing number of family offices, banks have been seen giving very attractive offers to attract candidates to join the bank and bring their book of clients and revenue," says Mr Nette. This comes as wealth management continues to be a growth driver for banks in Asia.

RGF's Mr Neo believes that roles relating to e-payment services will be in demand, on the back of Singapore's push to be a cashless nation.

Regardless of one's role, be it back-end, middle-office or front end, the ability to incorporate technology will become increasingly significant in the world of financial services.

In a speech at the Institute of Banking and Finance's gala dinner in September 2019, Minister for Education Ong Ye Kung, who is also a board member of the Monetary Authority of Singapore, noted that one in three job roles will "substantially change", with tasks being substituted and roles merging.

"Some job roles - a minority - will be displaced," he told the audience. At the same time, he assuaged fears that there will be a huge shake out and massive replacement of workers in financial services.

According to him, the "basic functioning" of the industry still depends mostly on professional and technical skills, institutional knowledge, and customer relationships.

"What has changed is that all workers performing those tasks need to now familiarise themselves with technology," he added.

Keeping pace with the changes

Even as banks here plough their efforts into retraining their workers for the future, the question is whether older staff can keep up. With traits such as digital-savviness, agility and enterprise being increasingly prioritised by banks, more senior bankers are feeling the heat, especially with fintechs increasingly taking on roles that banks used to dominate as well as the cheaper and younger talent in the market.

For those who unfortunately lose their jobs, such as Deutsche Bank's Ms Lim, it is an uphill task to find a suitable one despite their best efforts to reskill themselves.

Even after more than a year of job hunting, she is not giving up. "The past year taught me a lesson in staying positive and resilient," she says. "I've moved out of my comfort zone through all these temp roles… you learn new skill sets, no matter what you do. There is no job too small."

She is taking active steps to become more employable, such as networking and trying to pick up new skills in other in-demand areas such as anti-money laundering and technology. She also intends to sign up for some courses to refresh her skills.

While cases like Ms Lim's are still in the minority for now in Singapore, the fickleness of the industry is something that is always on the back of bankers' minds.

Observers believe that a long-term career in banking is not out of the question, but that will hinge on many factors.

For one, bankers need to take ownership of their career progression instead of seeing where the winds of change take them. This could entail upgrading of skills that are in demand and pivoting towards high growth areas.

And on the other side of the equation, banks need to play their part by having the foresight to plan ahead and innovate. If they do not progress, their people will likewise be unable to grow.

Mr Nette says: "If banks continue to be open-minded and adapt to stay ahead of the curve, banking could potentially return to be an attractive industry where candidates can see themselves building a long and illustrious career."