Risk & Compliance
2019 / 2020 Singapore Risk & Compliance Market Trends Report
2 months ago by Michelle Tay, Gigi Ng / Back to all blogs
2019 proves optimistic for risk and compliance professionals in Singapore, as the industry adapts to an increasing prevalence of disruptive technologies. Technology is seen to be incorporated in all aspects of risks and compliance jobs, and talent with programming capabilities such as R and Python are highly sought after, as businesses continue to build teams with specific functions such as data modelling, validation and stress testing to support the analysis of various risk areas, including but not limited to investment risk, credit risk and liquidity risk.
With the lack of local talent possessing programming skills and exposure to the financial services industry, companies are increasingly open to bringing in strong technology candidates with no prior experience working in the financial sector to complement their existing teams. Candidates with strong business presentation skills who can present their models and recommendations are in demand.
Insurance: With the Asia-Pacific region being the focal point for the insurance industry’s growth, risk and compliance recruitment is going strong in the insurance sector as there has been a growing demand for regional risk and compliance teams based in Singapore, to manage the growing regional presence in this field.
Compliance recruitment in the insurance sector in Singapore received a boost when the Monetary Authority of Singapore (MAS) released new guidelines in May on processes and controls to prevent money laundering and countering the financing of terrorism (CFT). The guidelines relate to general insurance and reinsurance businesses, as well as businesses related to accident and health policies. This move is likely to see an increased demand for compliance talent with such expertise. With MAS scrutinising the financial advisory industry, companies in this space are incorporating market conduct trainings to financial advisors to address the risk on market conduct complaints and issues.
It is also observed that hybrid talent such as qualified actuarial professionals with risk experience are high in demand. Having such professionals in the enterprise risk team greatly facilitates the risk assessment process.
Fintech: Within the fintech space, we see exponential growth in the start-up businesses focusing on payment solutions and remittance. With the new Payments Services Bill released by MAS, start-ups are beginning to place more focus on compliance activities and bringing in talent from established payment platforms to set up compliance frameworks. Compliance talents with fintech experience are highly sought after to bring proven best practices along with them in their career. Searches in this area are mainly focused on AML / CFT candidates.
Consumer and SME credit lending fintech companies are also gaining huge traction. These companies are utilising non-traditional data to perform credit analysis and providing simple and efficient methods of acquiring loan. Credit risk analytics talent with data science capabilities are extremely in demand as they are able to put in place credit scoring methodologies using non-traditional data sets. Many SME businesses are turning to these fintech companies to secure loans for their business needs as they surpass many traditional banks in efficiency capabilities.
Across the financial sector, data privacy roles in the regulatory compliance function is a space to watch. Under increasing regulatory and consumer pressure over data collection through multiple touchpoints, companies are seen stepping up their internal governance, PDPA compliance and data protection measures.
Commodities: The commodities trading space has seen huge growth, as Singapore continues to position itself as a commodities trading hub, and this trend is expected to continue until 2020 given Singapore’s strategic location and optimal US dollar liquidity.
The broader commodities market in Singapore looks especially promising for risk professionals, as we see an increased demand for risk managers, especially in the credit risk area as foreign companies expand their trading presence in Singapore to manage the risk exposure of the trading business locally.
This high demand for risk talent in commodities will continue over the next two to three years. This demand has also seen a shift in young talent moving out of the traditional banking setup for the commodities industry. Individuals with prior knowledge in ETRM /CTRM systems are also highly valued, as companies digitise their trade management and risk management processes.
Asset management and Trust: Within asset management, there has been a fair amount of restructuring and consolidation. In the past year, this industry has also faced challenges to perform well financially. With that, companies aim to achieve a lean structure in their support function through reducing headcount.
Trust and corporate services companies, on the other hand, are experiencing growth. Compliance talent with strong interpersonal and communications skills who are well-versed in managing internal and external stakeholders are brought in to support the front-line business directly.
With the exception of replacement roles, banks are more cautious about hiring in 2019 leading to 2020. Local banks already completed their expansionary hires in 2018, and opportunities in foreign banks are limited due to their headcount freeze and cost-cutting programmes. This is mainly due to the uncertainty surrounding Brexit, the looming US trade relations with China, and slower economic growth expected in Singapore.
There is continued demand for risk candidates with strong quantitative and financial engineering backgrounds. Junior risk functions, however, are in decline due to Machine Learning (ML) and Artificial Intelligence (AI).
On the compliance front, the demand is mainly in AML / FCC. This demand is seen especially in private banks, due to the higher risk profiles of their customer base. Regulatory compliance candidates remain sought after with some banks placing an emphasis on prior MAS or data protection experience.
Risk analytics positions in the areas of liquidity risk and consumer credit risk are growing rapidly due to the advent of digitalisation which has led organisations to implement risk management methodologies. There is certainly hiring potential in the unchartered territory of Base III liquidity risk, even though the complexity of bank operations in multiple currencies and legal entities spread across various geographical locations may pose significant implementation challenges.
Banks are also turning to Fintech for talent in the area of consumer credit analytics and data analytics to arrest the issue of “brain drain” and sliding market share It remains to be seen how companies (banks and non-banks) that are awarded with the digital bank licenses scale up to serve SMEs and non-retail segments. There could be some talent movement at banks that have recently set up their own Fintech unit and partnership arm.
We still observe positive trends in bonus payout, which could go up to three to six months. Salary increment, however, has not kept pace with bonuses received. Increments are on the average at 5 to 10% for talent who remain in the same firm, and an average of 20% if the talent chooses to move to another role.
Given the risk and compliance opportunities in today's market, one question remains:
Are financial services companies paying the right salaries and bonuses to retain and attract the risk and compliance talent you need?
Download our 2019/2020 Singapore Risk and Compliance market trends report and find out.
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