SINGAPORE - 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 40th anniversary dinner on June 10, Mr Tharman, who is also Finance Minister, said the sector has been buffeted by speedy technological change. This has caused 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.
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