The Inside Story of Corporate and Institutional Banking in Singapore

The Inside Story of Corporate and Institutional Banking in Singapore

With a first-class infrastructure, a welcoming government and an educated and multi-lingual populace, Singapore has long been an ideal location for businesses to thrive. Whether it be local start-ups, expanding Asian companies or global MNCs establishing regional hubs, Singapore is world renowned for being amenable to a wide number of industries, with corporate and institutional banking no exception. However, the coming 12 months is likely to see a huge expansion in the sector thanks to the Singaporean government taking a strategic view towards growing the country as a world-class trade financing hub.

In October of last year the nation’s financial regulatory body, Monetary Authority of Singapore (MAS), released its Financial Services Industry Transformation Map. Through the map MAS outlines its ambitious vision for the city state becoming the leading financial centre in Asia, with a number of progressive strategies and innovations key to achieving this goal.

Through this map and other policies, Singapore is targeting an average 4.3 per cent annual growth in the financial sector between 2016 and 2020, as well as creating 3,000 net jobs in financial services and 1,000 net jobs in the fintech sector each year. Technology and digitalisation are particularly key in achieving this.

According to MAS, “With technology transforming the way financial services are produced, delivered, and consumed, it is critical that Singapore’s financial sector also transforms, to stay relevant and competitive.” One strategy to affect this evolution is the creation of the National Trade Platform (NTP), a collaboration with the Government Technology Agency of Singapore (GovTech). Created as a trade and logistics IT ecosystem connecting businesses, community platforms and government systems, NTP is a catch-all trade centre for Business-to-Government and Business-to-Business services.

In the corporate and institutional banking sectors, this means that digitalisation initiatives can be developed for the advancement of transaction banking. Developments in digital technologies are dramatically changing the roles that payments play in how businesses operate and in how consumers interact with them. Fintech payment channels are predicted to increase by ten per cent in the next two years, and fifty per cent in five years, and MAS estimates that financial institutions slow to adopt new technologies could experience income losses of up to five per cent. For organisations that are looking to avoid future losses as the technology improves, the NTP is likely to prove crucial.

Further to these initiatives, the government is also turning to the rule of law in order to advance Singapore’s reputation as a finance hub, enacting the International Arbitration Act. This landmark legislation enables its users to enjoy significantly lower legal costs when pursuing cases, as well as improving balance sheets and legal budgets, bringing Singapore in line with other leading centres of dispute resolution. A result of this new legislation is that trade-centric clients, especially western MNC’s and commodities companies, are recognising the potential benefits, driving a trend for the basing of shared services and regional hubs in Singapore.

Away from the Lion City, Mainland China’s Belt and Road initiative – the modern-day ‘Silk Road’ strategy to connect Mainland China with Europe, the Middle East and Asia through trade and infrastructure – is also driving banking recruitment in Singapore. With the government’s insistence that the country remains a competitive trade financing house, they are paying an increased level of attention to the corporate banking industry, be it MNCs, middle market enterprises (MMEs) or small and medium enterprises (SMEs).

As Belt and Road is set to affect a wide array of industries, corporate banks are turning their attention to local companies looking to capitalise on the potential that the initiative signifies, as well as looking to Mainland China to expand portfolios. This move is generating a trend for the recruitment of relationship managers (RMs), especially experienced ‘’hunter’ RMs that are able to nurture and grow existing portfolios by cross-selling products as well as leverage on existing networks.

Conversely, in the commercial sphere a number of MMEs are looking to use the Belt and Road initiative as a way of improving growth strategies. According to a HSBC survey, approximately 26 per cent of MMEs in 2017 were focused primarily on growing their current market. To this end many MMEs in Singapore are turning to RMs with a more aggressive ‘hunter’ approach, those who can attract domestic clients operating within Mainland China’s expansion schemes. That is not to say that companies are focusing solely on home markets. The HSBC study indicates that 13 per cent of MMEs are looking towards global growth, meaning that RMs with international exposure, are in possession of good contacts and can help banks understand and implement expansion strategies are highly sought after.

It is a combination of these factors that is driving an increasingly fertile recruitment market in Singapore. Though most recruitment in corporate and institutional banking in 2017 was centred around replacement headcount, the coming 12 months is likely to see a revival of movement for these experienced RMs in all areas of the industry. Due to competitive nature of the market, firms are showing a tendency to look outside of traditional channels in recruitment strategies.

One example of this is the trend of crossover of candidates between investment and corporate banking, particularly for product development and advisory roles. Clients demand tailor made financing solutions on all aspects of transaction that often cuts across business and product lines. Thus, candidates with transferable skill sets, in terms of product or industry expertise are able to cross over, many in fact consider this as a ‘flight to safety’ given the volatility of the investment banking industry in recent times.

However, despite this competitiveness, companies are increasingly conscious of protecting their brand, and as such marketing for roles is limited due to the devaluing effect that the appearance of mass-hiring can have. Instead, companies looking for top performing RMs and product specialists are turning to recruitment companies such as Hays. As well as having access to candidates actively seeking positions, recruitment professionals also retain links to passive candidates, those who are perhaps performing successfully in their current roles and are not necessarily considering a change in their employment situation. Recruitment companies can reach out to these individuals and advise them on both the opportunities available, as well as their own value in the market.

And there can be no doubt that there is great value in the market right now. With the Singaporean government putting so many resources into developing the industry through innovation and legislation, the time for Singapore to rise to become the region’s financial trading hub may be just around the corner. Firms ready to move and acquire the best candidates can thrive in the Lion City, with an increasingly positive outlook in the year ahead.

If you would like to discuss this report in more depth or you wish to discuss your job search or recruitment needs, please email Marcus Chin, Manager for Hays Singapore at Marcus.Chin@hays.com.sg.