- This article first appeared on Banking Today (issue 125).
The world’s financial technology (fintech) industry is made up of four predominant sub-areas - payments, digital lending, blockchain and digital wealth management.
With new advances in technology, the fintech industry does not just provide customers with a whole new suite of products and services that are designed to make their lives easier. They are also giving traditional financial institutions a run for their money, enhancing operational efficiency, and driving the industry to innovate just to stay in the game.
In 2019, the Hong Kong Monetary Authority granted approval to launch eight new virtual banks. Traditional institutions like HSBC and OCBC have amped up their digital banking services to enable digital and tech-savvy customers to transact and invest online.
From straightforward money transfers to complicated business loan applications, Hongkongers can do almost everything from their smartphones without the need to walk into the branch. Carrying cash around has become a thing of the past, attributed to the enhanced digital and technological capabilities in digital banking. Today, even the physical card chip in credit cards have been built into smartphones.
These digital services developed further during the pandemic when banks were forced to operate at a much lower capacity for social distancing purposes. COVID-19 also gave rise to the development of the financial industry as customers sought to grow their wealth during one of the most financially opportune moments in our generation.
As one of the four Asian tigers, Hong Kong SAR's economic growth remains prominent. More than 600 fintech companies and 3,700 start-ups landed in recent years, with 80% of them planning to expand further.
However, when compared to other financial hubs like the UK and Singapore, Hong Kong SAR may have some catching up to do. In Singapore - ASEAN’s financial hub - crypto and blockchain start-ups are snatching the investment crown from payment firms, accounting for US$1.5 million over 82 deals in 2021, a surge from US$109.8 million in 2020.
Here are the latest industry and talent trends in fintech in Greater China:
hong kong is in a unique position to stay at the forefront of fintech
Key technologies and innovation drive the development of the fintech industry. The strong digital economy and fintech capabilities gives China a competitive advantage, allowing the Chinese fintech industry to thrive and transform the industry's competitive landscape on a global scale.
Countries all around the world are in awe of China’s cashless technology infrastructure. Chinese citizens can navigate their entire lives in cities using just their smartphones, even when buying food from street vendors in Suzhou or Xiamen. However, it rightfully raises the question about data privacy and integrity all around the world and this is exactly where Hong Kong SAR steps in.
A survey released by the FinTech Association of Hong Kong reiterates that Hong Kong SAR remains a strong hub to build and enhance artificial intelligence (AI), cloud computing, and big data businesses because of “its role as a financial hub and well-developed tech ecosystem”.
Hong Kong SAR, as a critical market in the Greater Bay Area, has the geographical advantage to leverage world-class technology to develop and improve existing fintech products and services to serve as Asia's fintech hub.
Beyond that, Hong Kong’s deeply-rooted financial services industry is already developing and improving compliance strategies and frameworks to further regulate the fintech sector.
Not only will these new and improved frameworks protect the interests of investors and fintech companies in Hong Kong SAR, but it will also attract more new entrants, business talent and innovative business models to the city, and by extension, to mainland China and the rest of the world.
are banking talent moving away from traditional banks?
The shortage of skilled workers in Hong Kong is not a new challenge faced by business owners and HR professionals across every industry, including banking and financial services. Even before the pandemic, many banks and financial institutions found it difficult to attract and retain skilled talent.
Rather despondently, many employers tend to make short-term incentive plans for the annual post-bonus exodus that typically happens between March and April. Which is in anticipation of employees switching for higher salaries after receiving their payouts.
However, this method of talent attraction may not be enough to retain current talent in the long run. In our recently released Employer Brand Research report, one in four finance respondents changed employers between July and December last year. This is 3% higher than the market average in Hong Kong SAR.
When the fintech industry grew, it opened up more job opportunities for the same group of talent. In other words, front and middle office bankers now have more options to choose from when considering a career switch. This is very exciting, particularly for bankers, who previously thought they would only have one career path to consider among a short list of financial institutions.
People tend to think that the fintech industry is only attractive to the younger generation of workers, as these employers tend to have cooler workspaces and more exciting tech projects to work on. The reality is that fintech companies are capable of attracting more experienced professionals who are looking for opportunities to really hone their skills with fewer red tapes, the difference lies in the company's talent management strategy.
finance professionals prioritise training opportunities over high salaries
The 2022 employer brand research revealed that 54% of respondents who work in financial services and insurance switched careers in favour of employers that support a good work-life balance. Meanwhile, 51% of the same group of respondents said that they were motivated to move to an employer that provides an attractive salary and benefits.
What is more surprising is that when we looked at the subset of respondents who worked in finance and insurance, salary and benefits are the fifth reason why they resigned in 2021. The top reason why they switched employers is that they want to work for an employer that provides good training.
72% of all finance and insurance professionals who participated in our independent survey said that it’s important for them that their employers offer training programmes to further support their careers. However, only 54% felt supported by their employers.
The banking and financial services industry is renowned for the sectors’ ability to pay high salaries and even higher bonuses. So why is it that finance professionals are still not attracted to high salaries and bonuses? The answer is simple – when that particular expectation is met, apart from attractive salary, employees will start to look at other factors, such as training and work-life balance. Companies should give focus to talent development as this can help reshape the future of the financial landscape across the region.
On the other hand, fintech companies are particularly good at offering training and development opportunities because they are constantly creating new products and solutions to meet growing customer and market demands. Employees are offered more opportunities to test their knowledge and capabilities at every stage of the project. By the end of the project, they would have experienced the ups and downs - from idea generation all the way to post-launch maintenance.
Through these experiences, employees become more confident when applying their skills and knowledge to future projects. They will also gain a higher satisfaction level at work, especially when their contributions to the project reap extraordinary rewards.
the future is bright for those who take advantage of it.
Fintech has branched out to many verticals in the past years. Besides payments, the industry saw an increasing number of firms in insurance tech, regulatory tech as well as blockchain technology. These digital products and solutions complement the services provided by traditional firms. Investors are relying on advisory and data analytics to make smarter decisions in green financing, cryptocurrency, asset management and more - key disciplines that will be critical in powering our future financial system.
Fintechs play critical roles in the future of our financial system as they further accelerate the growth of Hong Kong SAR’s economy. They will continue to collaborate with big institutions to launch new products and services as well as drive more competition in the business and labour landscapes.
The quality of your talent will determine your business success. Organisations that want to attract and retain highly-skilled talent would need to reinvent and showcase their total employee and talent experience - from hybrid work to training; recognition to benefits. Only companies that are agile enough to change up their talent strategies to meet the new expectations of the modern workforce would be able to take big leaps forward and stay ahead of the game in the constantly-evolving financial services landscape.
work with randstad
Randstad Hong Kong provides a full suite of talent solutions for companies located in the Greater Bay Area. In addition to our specialised talent recruitment services. We also offer research reports and market mapping to employers that are looking to strengthen their employer brand and to secure the talent they need to stay ahead of the business competition. Contact us for more information or tell us your talent recruitment requirements and we’ll assign a specialist to you.
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