Hong Kong banking sector is proving its resilience

There is still a healthy pipeline of job opportunities within Hong Kong’s banking industry despite the economic and political uncertainties. While the city has been grabbing the headlines for the wrong reasons, namely the ongoing political protests, the banking sector is holding up, and could actually see growth in the second half of the year and into 2020.

One of the reasons for this conservative optimism is the emergence of virtual banks which is expected to see fierce competition for talent. Earlier this year, the Hong Kong government granted eight virtual banking licences to major players such as Ant Financial, TenCent, ICBC, Bank of China and Standard Chartered Bank who are now launching their own subsidiaries or are involved in joint ventures.

‘’Fintech and virtual banks are growing everywhere, and particularly in Hong Kong with the granting of the eight banking licences. We have yet to see a lot of these expansions plans but we expect that to happen in the second half of this year and in 2020,’’ says Keith Wong, country director for recruitment firm Links International.

Shift towards fintech

The market’s rising appetite for fintech should see businesses fight hard to attract the best talent. ‘’We are expecting to have a stage of intensive hiring as companies build whole new businesses from scratch. As the market continues to grow, talent will be needed from business chiefs to operational staff, but banks will find it increasingly challenging to find talent with the right skills set,’’ Wong adds.

The rise of virtual banks, and the broader trend of fintech, is expected to see a structural change within financial hubs in Asia including Hong Kong, Singapore and Shanghai, but not in the short-term. ‘’We are at the beginning of the trend of replacing the traditional banks with those focused on fintech but this is probably still a few years’ off.’’

This should create a steady pipeline of fintech roles that will be in hot demand as banks look to capitalize on the growing use of technology. Currently this is the case within the Artificial Intelligence (AI) and cybersecurity spaces which are facing a huge talent gap as demand outstrips supply.

The rise of fintech couldn’t have come at a better time as there has been some doom and gloom around the banking sector with big job losses announced by the likes of Deutsche and HSBC. But despite these cutbacks, Wong says that global banks are still hiring in other areas across the region.

Back to basics

‘’Traditional banks have not seen a hiring freeze despite cutting jobs. A lot of them are going back to basics, having previously expanded into markets they were not fully familiar with. They are changing their strategy, and still need people to do this.’’

In Hong Kong, the market is seeing a rise in interest for multilingual bankers with solid experience as large banks like Standard Chartered, HSBC, and DBS arm themselves for expansion. There is a still a need for talent in the city but this tends to be in the upper bracket and as replacements, rather than new hires. But Wong admits that new companies coming into Hong Kong slowed down in the first half of year. ‘’Companies may have not yet agreed their expansion plans yet and are putting them on hold until there is more certainty’’.
 

The first half of the year was a challenging one for Hong Kong’s jobs market for a number of reasons. The economy has been affected by China’s trade war with the US, along with the ongoing-running political protests. The economy was already facing a slowdown before these two events unfolded. Both these hot topics could dampen economic growth in Hong Kong for the second half of the year.

China’s trade war with the US is weighing down on Hong Kong’s wider economy, not just the financial services industry. Some employers are looking at relocating factories to other parts of Southeast Asia, including Vietnam, Thailand and Cambodia. ‘’A lot of companies are looking at alternative locations, although this started some years back. Cost is always an issue for them and they are constantly looking for the cheapest place to manufacture their goods. Now you have the political uncertainty in Hong Kong and China. Manufacturing is just the first step and others will follow.’’

Asia’s financial hubs

Wong is responsible for the overall strategy for Links International in the financial hubs of Hong Kong, Singapore and Shanghai. Each city has its own strengths and challenges when it comes to economic growth and job opportunities. ‘’Shanghai has seen a slowdown in foreign investment but is being supported by domestic demand, particularly Chinese-owned state enterprises. Singapore is seen as more stable economically than Hong Kong, and has a healthy start-up scene which is fueling growth. We should see more funding for start-ups and this hasn’t surfaced yet.’’

It’s predicted that in the second half of 2019 there will be even greater competition to find and keep top talent in the banking industry. With the fierce market demand, it’s likely that employers will start putting in more effort to keep talent from leaking into the hands of competitors. As a result, employers will need to provide attractive packages with lots of flexibility, autonomy, state-of the-art offices and a winning culture.

And for those candidates looking for opportunities ahead of the expected growth in fintech and virtual banks? ‘’Get any exposure you can to fintech and virtual banking now. Be aware of what is happening in the market and be prepared to move in that direction,’’ Wong advises.