How to avoid offshoring this year: back office jobs set to stay in Singapore and Hong Kong

Back-office staff at banks in Singapore and Hong Kong haven’t faced the best job market over the past three years. Amid the recent Asian boom in middle-office roles (driven by regulatory expansion) and front-office jobs (powered by the region’s economic rise), many operations positions have been offshored away to cheaper locations.

While local banks in Singapore and Hong Kong have largely bucked the offshoring trend, international players like Barclays, Citi, Credit Suisse, Deutsche Bank, HSBC and UBS have been transferring back-office jobs into lower-cost Asian markets, in particular India and the Philippines. Mainland China and Malaysia are also now emerging as near-by alternatives to Hong Kong and Singapore respectively. Standard Chartered is expanding its operations hub in Malaysia, for example.

“I think we’ll see another two years minimum of offshoring,” says Craig Brewer, a director at recruitment firm FiveTen Group in Singapore. “A base of onshore back-office functions will then form – operations roles that are business facing, handle complex products and clients, or help the middle-office compliance and risk teams.”

If you already work in a back-office job in Singapore or Hong Kong, however, your career won’t necessarily disappear this year. We’ve identified some of the few remaining functions that should, for the next 12 months at least, remain relatively immune from offshoring.

Regulatory operations

Operations control and regulatory operations professionals are in demand as tightening financial rules affect banks’ internal processes, says Melissa Lau, a senior division director at recruiters Robert Half in Hong Kong. “More people are being added to core compliance and risk teams in Asia and this trickles down to adding more operations staff to control these areas. These professionals need to be based on the ground as they are the people testing and implementing the controls, so direct access to end users and stakeholders is critical,” she explains.

Trade settlement

Settlement roles have generally been prime targets for offshoring away from Hong Kong, but the launch of Shanghai-Hong Kong Stock Connect in November has triggered a rise in onshore settlements jobs because local talent is better equipped to handle the technical complexities of the new trading scheme. “This trading link has seen volumes on both exchanges increase, so more settlements headcount has been added,” says Lau.

Client services

Some client services jobs continue to be based in Singapore and Hong Kong, typically those servicing high-value private and corporate clients. “In client services banks need to ensure they strike a balance between cost and quality. This function must remain as close to the business as possible,” says Grant Torrens, business director of recruiters Hays in Singapore.

Know your customer (KYC)

KYC jobs are among the most skilled in back-office banking, making it tricky to source staff in offshore Asian markets, says Ng Lay Hoon, associate director of recruitment agency Michael Page in Singapore. “Additionally, the Monetary Authority of Singapore is placing increased importance on the on-going monitoring of clients, which requires KYC professionals to be based onshore.”

KYC is one of the few back-office functions suffering from talent shortages in Singapore itself, says Matthew Ng, manager, banking and financial services at recruiters Ambition in Singapore. “A lot of the hiring in KYC is done in bulk and the Fair Consideration Framework discourages applicants outside of Singapore from applying. Banks also face increasingly competition from commodity trading firms wanting the same people,” he says.

“To tackle talent shortages, banks are looking at measures such as hiring graduates and training them in KYC and on-boarding processes. They are also considering retail branch-support candidates or relationship managers with prior experience in on-boarding,” adds Lim Chai Leng, associate director, banking and financial services, at recruiters Randstad in Singapore.