What are some banking and financial trends to look out for in 2018?

In an attempt to move towards a smart city, Singapore has been gradually moving towards digitisation. The financial sector which is a big part of this city, is no exception. In March, Juniper Research has highlighted Singapore as a top performer in a global smart city ranking. In addition, the latest Brand Financing Banking 500 report also ranked our local banks as one of the most valuable in terms of banking brand. DBS came in first, followed by OCBC in second place and UOB taking the third spot in ASEAN.

Lauded for a highly innovative banking sector, Singapore’s financial sector is only going to continue progressing even more quickly. This is especially with technology.

Hence, what are some of the key areas and its relevant trends we need to take note of this 2018?

1. Cryptocurrency

The cryptocurrency market is currently facing a turmoil as values and prices plummet. As a result, many fear the long-term sustainability of this cryptocurrency ecosystem. Social media giants like Twitter and Facebook have also started to ban cryptocurrency ads on their platforms, leading to greater uncertainty. Despite the current marketing looking bullish, improvements within regulation, technology and usability may actually set to improve adoption rates.

As Dr Julian Hosp, Co-founder and President of TenX – a cryptocurrency company – says:

“When you dismiss real risks as fear, uncertainty and doubt (FUD), you could be blindsided.”

Anonymity within the cryptocurrency market has led to associations with drug trading and money laundering. But it is this anonymity, and the convenience with which transactions can be made, that have fuelled the popularity of cryptocurrencies.

Singapore, which is considered to be the Asian hub for fintech and initial coin offering, is starting with tighter regulations to curb potential risks. The belief that regulations may undermine markets is a short-sighted perspective. In the long run, companies require legal stability and certainty that derive from rules and regulation. Regulation also provides users and institutional clients with the confidence to invest.

Despite the uncertainty, major companies are still receptive towards the acceptance of Bitcoin as a form of payment. One reason for this is the accessibility of Bitcoin and other cryptocurrencies. For instance, Microsoft now supports Bitcoin Cash to fund users account. This is made possible courtesy of BitPay, which recently added support for the popular altcoin.

While the cryptocurrency market continues to struggle a little, there is much anticipation on what this sector can potentially bring later this year.

2. Robotic Process Automation (RPA)

RPA, at its core, is designed to address monotonous and tedious repetitive tasks. RPA allows these tasks to be handled quickly and efficiently with technology that mimics humans, and without their intervention. It bridges complicated systems through streamlined data management and processes. Furthermore, it does not require IT architecture changes whilst deployment can be easily scaled when needed. By processing through cognitive systems, RPA can even interact with the natural language, haul and interpret documents. It will then use them for other practical purposes.

A recent report from the World Economic Forum predicted an elimination of five million jobs within developed countries by 2020 due to intelligent. However, RPA is in fact driving greater job opportunities. This is especially evident within the contract market as the gig economy continues to rise.

Humans would still be needed to teach, monitor, and maintain this automated technology. Intelligent automation on the other hand, would amplify and improve human skills and judgement. There would also be demand for multiple roles that require creativity, empathy, and judgement, where machines continue to play a limited role for the foreseeable future.

3. Data Analytics

Banks have embraced the benefits that advanced business-analytics data mining and predictive-modelling techniques can bring. As a result, they have become smarter, more responsive and are able to predict potential risks and events.

DBS is a leading example of an early adopter of technology within the local banking space. They boast of their predictive abilities even to the point that they are made aware before an Automated Teller Machine (ATM) mechanically fails. This is extremely important as DBS has one of the busiest ATM network in the world and downtime is taken very seriously. Its audit team can also predict the branch which would likely have an operational issue. Apart from these, DBS also uses data to detect rogue traders and fraudsters within the procurement and trade areas.

This has led DBS to top rankings within Asia for its brand value, as a result of its pre-emptive measures and strategies taken to stay ahead of their competition.

Ultimately, individuals would need to prepare themselves in order to stay relevant and valuable within the financial industry. This can come in the form of re-training or upskilling which is especially crucial with the speed that technology is integrated into various sectors today.

More upskilling and reskilling

Singapore's Institute of Banking and Finance (IBF) is looking to set up a Career Centre by July 2018 to provide advisory services for financial industry professionals. According to a joint media release with the Monetary Authority of Singapore (MAS), the centre will provide a suite of services ranging from setting competency standards and promoting skills development, to career advisory, job matching, and placements.

The HR tripartite advisory 2018 that was recently launched in March, enforces companies to reskill their staff. In this constantly evolving market, banks should take up greater responsibility of retraining their staff amidst technological changes. In addition, they are also called upon to be more inclusive with their hiring choices. This can be in the form of hiring individuals who are able to perform the job, rather than set a strict minimum number of years of experience or based it on paper qualifications alone.

The government is also pumping in $145 million to educate Singaporeans with digital skills. This would mainly focus on emerging areas such as data analytics, artificial intelligence, the Internet of Things and cybersecurity. An additional 20,000 training vacancies would also be created as a platform to equip them with new digital skills.

If you would like to get informed on the talent pipeline within these exciting markets or understand what other organisations are planning, follow us on our LinkedIn page.

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