How is tech transformation within digital finance impacting the gig economy?
Technology and digitalisation are rapidly transforming the way in which the financial sector operates. This impacts business operations within financial institutions and banks as they work towards restructuring their focus towards tech; it also impacts the expectations of customers who demand for speed, immediacy and ease in use of its services.
Currently, the focus on customer centricity within the banking and financial services sector has led to the crucial need for digital expertise in banks. This thus led to the demand for an increase of headcount within the digital teams, impacting budgets and headcount costs. As such, the gig economy which is also the contractual market in this context, has witnessed a surge in demand since they are hired on a project basis and is easier to justify in terms of costs and approvals.
How is the contractual jobs market looking like?
- An influx of jobs
To support the digital transformation within banks, new and niche tech roles are constantly emerging. This is especially within retail banking, private banking and wealth management – areas that require greater support for tech development.
More tech roles are needed within retail banking given the demand for development of new and improved financial and payment services. From cashless services to Artificial Intelligence (AI) and e-wallets; talents such as developers, software engineers, UX/UI specialists and even product specialists are hence growing in demand. This is prominent especially within the contractual market where experts are hired on project-basis.
For private banking and wealth management, the demand lies in the improvement of processes that support front, middle and back offices. There is also considerable optimism that banks will find the right strategy enabled hugely by technology. This is also to cater to the younger generations who are likely to embrace new models and offerings.
- Younger talent stepping up
In Singapore, we see more entrepreneurship programmes, an increase of management programmes for fresh grads, larger number of degree holders from tech/computing backgrounds, more scholarships as well as attachment to banks. This is evidence of an increasing supply of talent which can potentially support future digital teams.
On the other hand, there seems to be a dwindling number of senior talent within the sector. Hence, retaining strategies are crucial especially in banks. This includes re-training or upskilling current employees who already have the basic understanding of functions within the banks. With the additional tech know-hows and expertise, they can be a great asset to retain in the organisation. Other retaining strategies include an increase of salaries or benefits. Maybank and OCBC for instance, are in the lead for these upskilling programmes. Across the board, tech salaries are also rising by 4% as reported by Human Resources Online.
- More conversions to perm
Adoption of tech has brought about cost-savings in terms of operational costs. This will have a positive spill-over effect on headcount budgets as teams can now afford to spend more in terms of salary packages, as well as extending contracts and converting contractors to permanent employees.
However, tech talent will need to first be hired as contractual workers to be offered such an opportunity due to the upsurge of immediate costs due to bulk hiring. This has ultimately led to an uptake in the contracts market and is an attractive time to join the banking sector for tech specialists who are open to short stints with a potential to convert to a permanent role.
What is in it for consumers?
- Better management of finances
Especially for Singapore who is now a Smart Nation where technology has widespread use, e-payments and mobile banking transactions have taken over most traditional transactions. Although this have been a growing concern amongst some who suggest that we could potentially lose sight of the value of money, banks are doing their part to encourage better financial management amongst its consumers.
For example, customers of United Overseas Bank's digital bank will be able to keep track of their savings and expenses better in real time as a result of UOB's tie up with digital banking solutions provider Meniga.
Till date, it is the first bank in South-east Asia to employ Meniga's solution to simplify complex and multiple transaction datasets, turning the information into relevant data for its digital bank customers.
DBS mobile application also allows one to track financial transactions made in a month, breaking your expenses down to highlight what you tend to spend on the most. This for example, gives consumers a clear idea on where to cut expenditure if one intends on increasing their savings.
- More innovation of services
Banks will continue to innovate and get closer to their customers through their mobile devices, as well as digitise of banking services wherever possible.
The banking industry works towards tapping APIs for payment, authentication amongst many other areas. An increase number of banks have also started to experiment with AI, particularly robotics, in preparation for application within mainstream channels. They have also followed the likes of start-ups by forming small teams to generate, test, reject and improve ideas at greater speed.
Similar to Singapore in terms of openness towards digitalisation, Hong Kong too is one of Asia’s leading country for embracing open APIs. With Hong Kong Monetary Authority (HKMA)’s open API initiative, regulators are committed to build a healthy and open API ecosystem to keep up with worldwide development on the delivery of banking services. By mandating banks to make their customers’ data accessible to third parties and encouraging the use of open APIs, regulators are encouraging innovation and championing collaboration between third party fintechs and traditional banks. This will also likely impact consumers positively with the increase of innovation, and in a shorter period of time.
With the level of digitalisation happening across the banking and financial services sector in Singapore and Hong Kong, it is exciting to see what 2019 would bring in terms of innovation and transformation. If you or your team is looking to prepare for more digital initiatives in the coming year and would like to find out more about how the tech talent is looking in the market, do contact us via the form below or follow us on our LinkedIn page.