Regtech Development in Hong Kong: Talent as a Fuel for Growth

Manpower Situation and Talent Development Strategy of Regtech in Hong Kong, the UK, and Singapore 30 29 III. Singapore A Top 10 Global Regtech Market Singapore is a major financial center in Asia. It is a natural hub for fintech as it offers five key elements – talent, markets, progressive regulation, capital and strong government support – which together help propel fintech development. 46 Not surprisingly, Singapore is also one of the Top 10 global regtech markets. 47 The Monetary Authority of Singapore (MAS) and the city state’s government work closely with the industry for adoption of regtech in the country. Singapore’s government has allowed regtech companies to have access to some data sets for using in their solutions. A single data strategy has unified data sources across various government agencies through the MyInfo service via the Smart Nation Initiative. 48 Various steps by the Singaporean government have allowed efficient access and use of trustworthy data by financial institutions, thereby enabling initiatives such as SingPass Mobile which is a digital identity management system used to open personal banking accounts. This enables banks to meet the KYC requirements in a secure and efficient manner. The regtech ecosystem in Singapore is also being enhanced by its Fintech Association. A regtech subcommittee has been established by the Fintech Association with the main goals of talent development, engagement with industry and regulators, and nurturing development of regtech companies. The MAS has indicated deep involvement in the regtech industry, which has sent strong signals to the financial services industry about embracing technology as a priority in Singapore. Fintech Talent Demand Outpaced Local Supply Fintech/Regtech talent is in high demand in Singapore, as it has a conducive regulatory environment that encourages innovation in many sectors such as wealth management, compliance, cybersecurity, and robo-advisory. 49 Higher levels of fintech talent demand have outpaced the local supply as the competition to attract a job-ready workforce is accelerating. The gap between demand and supply may not reduce in the short run despite various efforts by the financial sector, educational institutions, and technology companies. The latest entry of technology giants in Singapore such as Tencent and Zoom, and presence of unicorns such as Grab is intensifying the scramble for tech talent. 50 Also, the demand for talent with specialized skillsets across various job families and technologies such as AI, machine learning (ML) and data science has increased substantially. A lack of relevant skillsets has been cited as the key driver of talent gap by a large majority of fintech employers (58%) in Singapore. 51 46. Enterprise Ireland and Kapronasia (2021). The State of RegTech in APAC. Evaluation of the Landscape & Market Opportunity for RegTech Companies. https://www.regtech.org.au/resources/Documents/RegTech%20in%20APAC_ EnterpriseIreland_June2021.pdf 47. Ibid 48. Smart Nation Singapore (2019). Smart Nation on Track for Digital Transformation. https://www.smartnation.gov.sg/ media-hub/press-releases/smart-nation-on-track-for-digital-transformation 49. Singapore Fintech Association and Accenture (2021). Fintech Talent Report 2021. https://singaporefintech.org/wp- content/uploads/2021/11/SFA-Accenture-FinTech-Talent-Report-2021.pdf 50. Channel News Asia (2021). Commentary: Techies Essential for Singapore to Stay Relevant as Regional Business Hub . https://www.channelnewsasia.com/commentary/ndr-workers-skills-singapore-foreign-talent-tech-digital-it- jobs-2149346 51. Singapore Fintech Association and Accenture (2021). Fintech Talent Report 2021. https://singaporefintech.org/wp- content/uploads/2021/11/SFA-Accenture-FinTech-Talent-Report-2021.pdf 52. Enterprise Ireland and Kapronasia (2021). The State of RegTech in APAC. Evaluation of the Landscape & Market Opportunity for RegTech Companies. https://www.regtech.org.au/resources/Documents/RegTech%20in%20APAC_ EnterpriseIreland_June2021.pdf 53. Singapore Fintech Association and Accenture (2021). Fintech Talent Report 2021. https://singaporefintech.org/wp- content/uploads/2021/11/SFA-Accenture-FinTech-Talent-Report-2021.pdf Employee referrals are considered the top source of talent for fintech in Singapore, but there is a great opportunity to leverage campus recruitment and gig marketplaces for tapping into potential candidates. A big proportion (92%) of companies leverage employee referrals for hiring as through it, they can tap on their network for identification of employees with the appropriate skillsets. Fintech companies also leverage online job portals, headhunters and employment agencies for hiring. Campus recruitment and career fairs have not been utilized to optimum levels in Singapore for talent recruitment. Singaporean Fintech Companies Need to Increase Spending on Learning Employee development is an undervalued investment in Singapore’s fintech industry. According to Fintech Talent Report 2021, 69% of survey respondents spend less than US$1,000 per year, per employee on learning and development, which is below the global average per year, per employee. There is clearly an increased need for learning and development for the employees to address the talent gap in Singapore. A major implication is that Singaporean fintech companies need to increase spending on learning and development on employees to increase their acquisition of necessary skills. Government Highly Supportive of Improving Manpower Situation The government is aware of the manpower situation, and has taken many actions to address the shortage of regtech talent in Singapore. For example, it provides grants for Singaporeans to return to university to retrain in subjects such as AI and Python programming language within a fintech curriculum. 52 The most common fintech training is on-the-job coaching and mentoring. Late-stage fintech/regtech companies are more structured and sophisticated in their talent development. They run hackathons, collaborate with training institutions, and have employee mobility programs that allow people to move across different positions based on their career goals and help them gain new skills. The biggest skill gaps are in the domains of technology (development and implementation, design and architecture), business and project management, and sales and marketing. There are also gaps in behavioral skills such as thinking, problem solving, and decision-making. Although companies are trying to plug the gaps in these areas, they face challenges. First of all, the cost of regtech labor in Singapore has also been rising as many employees leave their jobs for either more compensation or to pursue careers outside of regtech, which might not be as creative as they hoped. Companies Not Sustaining the Value Proposition of Fintech Employment There is some evidence that fintech talent are not experiencing the level of growth and opportunity they envisioned when they first joined the firms. 53 While fintech companies might have a strong employee value proposition that initially attracts people, the same companies are falling short to sustain the value proposition following employment. By not living up to their development and growth promises, they struggle to retain the best talent. Additional targeted actions need to be taken by companies to engage and retain employees.