Singapore braces for further job losses in the financial sector. Fewer new jobs are expected to be created and job redundancies are expected to rise, according to a speech yesterday from the Monetary Authority of Singapore (MAS), as the city continues to face its most severe recession to date.
Comparatively speaking, the financial and insurance services sector, which accounted for 13.3% of the country’s GDP last year, has stayed fairly resilient. The sector reported a year-on-year expansion of 5.9% over the first half of 2020, with 1,500 additional jobs created in 2020. Retrenchment levels have remained similar to quarterly levels in 2019.
However, Singapore’s economy has taken a substantial hit. The city’s GDP contracted by 13.2% year-on-year in the second quarter and the economy is expected to shrink by 5-7% overall in 2020. Data from labour market reports also revealed that retrenchments across sectors were much higher in the second quarter of this year compared to the first, rising from 3,220 to 6,700.
Deputy Managing Director of the MAS Jacqueline Lo warns against complacency in the sector, stating that “We must press on with the sector’s transformation efforts, in investing in the workforce for the future.” In order to do so, the MAS is pushing financial institutions to upskill existing staff in line with Singapore’s accelerated digitalisation.
As data analytics and automation become increasingly common, some jobs could be displaced. “Thus far, 25 local and foreign FIs have committed to support close to 5,000 employees,” Loh said. “However, given the accelerated pace of digitalisation, we need to do more, and at scale.”
The MAS, Institute of Banking and Finance (IBF), and Workforce Singapore are also experimenting with an artificial intelligence job-matching platform, which could help displaced workers reskill and move into adjacent roles. More details about the platform are expected to be released early next year.
The National Jobs Council was also formed earlier this year to mobilise resources in developing new job opportunities and provide skill-training for Singaporeans. IBF courses are now heavily subsidised, with 95% of course fees paid for by the MAS and IBF.
Already a leading financial hub in Asia, Singapore’s financial industry’s competitive edge hinges on the city’s ability to successfully integrate emerging financial technologies into its operations. Already, the MAS has received over 400 applications for the Digital Acceleration Grant from financial institutions and FinTech companies. Last year, the MAS also pledged to issue up to five licenses for virtual banks to operate in the city.
As Singapore continues to strengthen its position as a regional financial provider in Asia Pacific, its success relies on the competency of its workforce. “Human capital is the single most important ingredient of Singapore’s success as an international financial centre in Asia”, Loh states.
The country will continue to redouble its efforts in attracting foreign talent and upskilling local talent by providing them with international experience in Southeast Asia.