As the massive scope of Mainland China’s Belt and Road Initiative (BRI) has started taking shape, companies in Singapore are looking to see how they can capitalise on this ambitious project. With the BRI making significant headway in the past four years, trade between China and B&R countries has exceeded USD 3 trillion and continues to be on the rise. Foreign investments continue to surge and ‘development financing’ and commercial banks are playing a crucial role in the financing needs of B&R projects.
One major result of the focus on the BRI is how banks are turning their attention towards the South East Asian and Greater China market, impacting recruitment trends within corporate banking. Standard Chartered, for example which operates in 45 of the 60 plus Belt & Road markets, offers a range of tailor made solutions for clients in the form of project and export finance, loan syndication, trade and cash management solutions and financial market products. Industries under focus are Infrastructure and Utilities, Telecommunications and Energy.
The impact of this on CIB hiring in Singapore is that banks like HSBC, SCB, Credit Suisse and Citigroup have all promoted their cross-border capital markets and cash management services to leverage BRI opportunities. There are two key recruitment trends that we have witnessed.
Firstly, hiring for relationship Managers within both corporate and commercial banking, particularly with experience in ASEAN or Greater China markets are in high demand, according to Deepika Devarajan, Senior Consultant at Hays Singapore. “Banks are seeking candidates with a ‘hunter’ mind-set and strong regional experience to implement and nurture their expansion strategies”. Such highly sought after RM’s command between 25 to 30 per cent increment, which is significantly higher than the 10-15% average that we have witnessed in the last few years.
Hiring of Commercial Relationship Managers, specifically focusing on the Middle Market Enterprises (MME) segment has ramped up over the last six months. SME/MMEs are at the heart of Singapore’s economy contributing to two-thirds of its workforce and more than half of the country’s GDP. Singapore corporates have capitalised on the regional opportunities and revolutionised the way they design and market their products. Four in five Singapore based SMEs and MMEs are looking to expand into countries along the belt, revealed a HSBC commissioned report by Singapore Business Federation.
The second interesting trend that has been observed is the 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. As the economic and geopolitical implications of the Belt and Road Initiative continues to unfold, there is no doubt that this narrative will be at the heart of the CIB growth story for the upcoming year.
The second trope dominating the CIB sector is Digitalisation, touted as a key determinant of any bank’s ability to remain competitive in a rapidly evolving financial ecosystem. While ‘digital disruption’ is not exclusive to the banking industry, it has profound ramifications on corporate banking. The new competition posed by nimble fintechs offering low-cost international transfers, supply chain financing solutions, followed by artificial intelligence and blockchain technology – the financial stakes for corporate banks are high. The 2018 BCG Global Corporate Banking report suggests that these new digital platforms and channels will attract 30% of traditional corporate banking revenue posing a serious threat to the sector.
To remain competitive, banks need to undertake front to back digital transformations by developing a clear vision of how they will formulate and deploy their digital strategy. The digitalisation processes primarily focus on building digital customer-centric journeys that increase customer satisfaction, embedding innovative technologies along the value chain, and redefining operating models. DBS for example is named ‘World’s Best Digital Bank’ for being the first bank in the world to develop a methodology for measuring the financial value created by digitalisation. “DBS has shown the power of being articulate about digital banking and the bank has entrenched an entrepreneurial, tech-led culture which pervades every business line and every level of seniority”, said Euromoney. For its corporate and institutional customers, DBS is offering first fast Real-Time Payments gateway by extending its partnership with ACI Worldwide, a global e-payment solutions provider which originally developed IDEAL – DBS’ digital banking portal for corporates and SME customers. DBS Institutional banking reported a pre-tax profit increase of 71% across cash management, trade finance and investment banking.
The impact of digital strategies on hiring is generally positive. DBS, OCBC and UOB – Singapore’s three local banks together have surged over 4500 technology related hires. DBS accounts for nearly 75% of these hires, which also includes its “insourcing” of its previously used IT vendors.
While the proliferation of technology is forcing sweeping changes in corporate and institutional banking, it is apparent that effective digital strategies can open door to a wide variety of possibilities, revenue stream and competitive advantages.
Source: Hays Singapore