Singapore vs Hong Kong – competition or collaboration?
Asian tigers – Singapore and Hong Kong – have long been friendly competitors in the Asia Pacific (APAC) region. Known as one of the world’s top financial centres and facing massive technological transformation, both nations possess a wide array of IT innovation and solutions.
In my previous articles, I’ve delved into key innovations in Singapore and the impact it brings on the talent market within blockchain, software engineering and even artificial intelligence. However, Hong Kong is picking up its pace in establishing itself as banking tech hub. Currently, it ranks as a top leader when it comes to financial activity, boasting the world’s fourth-largest stock market.
With the similarities as well as differences both countries may have, how can this potentially pave the way for banking tech in Asia?
Early adopters of financial technologies (fintech)
Hong Kong is well-placed to remain as the primary financial gateway into China’s evolving market. The innovation of fintechs gives Hong Kong the potential to transform itself into the fintech leader in the APAC region.
On the flip side, Singapore pales slightly in comparison to Hong Kong in this aspect given the reluctance of traditional banks who are currently fixated on sticking to status quo. However, the nation is still well-positioned to take advantage of the benefits of new financial technologies, including blockchain and cloud technologies. Local bank, DBS, is also recognised as the top digital bank worldwide. As a hub for global trade and finance, the city-state offers a robust ecosystem of financial and fintech firms that are helping to foster innovation by leveraging its well-educated and technologically adept workforce.
Thriving tech start-up environment
Hong Kong’s start-up ecosystem is thriving with approximately 2,000 over start-ups who are employing over 5,000 employees in 2016. In 2017, the number of start-ups continued to rise by 16% and the number of staff employed in these start-ups increased by 21%.
Similar to Hong Kong, Singapore is also a prime location that renders easy access to growing tech markets in Southeast Asia. This is coupled with strong government support to create a nurturing environment for start-ups. In addition, the city is equipped with top-notch start-ups’ accelerators and incubators to provide entrepreneurs with the support they need. Various co-working spaces have been launched to allow start-ups with varying sizes to ‘adjust’ their office space according to their growth, rather than committing to rent a full-fledge office space. It also gives you the opportunity to meet other fellow start-ups. Housing a collaborative community of almost 500 entrepreneurs, creatives, and techies, ‘Found’, previously known as ‘The Hub’ is arguably the most established co-working space in Singapore.
Open banking readiness
Singapore easily beats Hong Kong and Australia in its readiness for open banking, according to a report by the International Data Corporation.
The report assesses a country’s readiness for open banking based on five factors including:
- Support of the regulatory environment;
- Level of adoption of partner and external APIs;
- State of digital transformation in banks;
- Level of security preparedness of banks; and
- Supporting fintech ecosystems
Robust regulatory frameworks and guidelines laid out by the Monetary Authority of Singapore as well as high banking digitisation kept the lion city well ahead of its peers in embracing new technologies. In fact, OCBC was the first bank in Southeast Asia to recognise the potential of the emerging technology and launched an open API platform back in 2016.
Talent shortage driving pay hikes and reskilling
With a chronic shortage of talent, it has led to the trend of pay hikes as banks are forced to increase their salary offering in order to poach good talent. Hong Kong is struggling to recruit top tech talent that can implement their digital blueprint. This is especially so due to a growing number of firms who battle to attract and retain the already limited supply of available tech manpower across various industries, reports efinancial careers.
Tech engineers are the most highly sought after but have the least number of applicants. Digital transformation and program management professionals are also in hot demand by banks.
The Hong Kong government has pledged that professionals in the list which include fintech experts, data scientists, cybersecurity professionals and IT experts, may enjoy prioritised immigration treatment under the Quality Migrant Admission Scheme (QMAS).
While cybersecurity currently pays less than many other roles, this may change within the next 12 to 24 months because banks in Hong Kong are recruiting more people in the profession and 20% pay rises are now becoming increasingly common.
Skill shortages in the functions mentioned above will also drive salary increments in Hong Kong, whereas banks in Singapore are typically open to re-training candidates who have a background in IT.
Moving forward – Need for collaboration
Singapore is a gateway to Southeast Asia and is seen as a wealth management hub, but Hong Kong boasts easy access to China's trade and capital flows. It is evident from the above that with the talent shortage in the Asia region, direct competition may cripple both countries than if they were to compliment the strengths of each other and reap cost savings instead.
If your organisation is interested to find out more information on the talent pipeline in Singapore and Hong Kong, or if your organisation requires advice on recruitment strategies in the coming year, do drop us an email at [email protected] Follow us on our LinkedIn page or visit our website for other industry-related insights.