Fintechs now employ far more people in Singapore than most banks do
Fintech firms collectively employ nearly 10,000 people in Singapore, Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), said in a speech. That’s about the same number as Standard Chartered’s workforce in the Republic, and it far exceeds the local headcounts of most other foreign banks, including HSBC and UBS, which have about 3,500 and 3,000 Singapore staff, respectively.
The fintech sector has become a “powerful creator of jobs”, said Menon, speaking at the Singapore Fintech Festival, Green Shoots Series. “Five years ago, we had about 50 fintech firms; we now have more than 1,000. Last year, fintech firms attracted a record S$1bn of investment. For the first half of this year, despite Covid-19, the fintech sector continued to attract equity funding and M&A amounting to S$650m,” he added.
Menon said Singapore has 40 innovation labs set up by banks and insurers, compared with “hardly any” five years ago. Some 180 “high value jobs” have been created in labs funded by MAS, of which about 60% are held by Singaporeans. “More than that, there is valuable learning and capability transfer, helping to build our local talent pool and pipeline for future leadership roles,” he added, referring to jobs in innovation labs.
MAS yesterday committed S$250m over the next three years under its newly enhanced Financial Sector Technology and Innovation Scheme (FSTI 2.0), some of which will be channeled into jobs-related initiatives. For example, the Innovation Lab Grant will co-fund 50% of the salaries of Singaporean hires for a period of two years, said Menon in his speech, which MAS has posted on its website. “FSTI 2.0 will encourage the expansion of the existing innovation labs and further develop Singaporean talent in fintech and innovation,” he added.
FSTI 2.0 also includes expanded funding for staff training for certain fintech projects, such as those focused on artificial intelligence and data analytics, and those focused on helping the development of industry-wide technological infrastructure. “Such training costs include expenses incurred to engage specialists to train the local talent pool, and expenses incurred to send local employees for overseas trainings. These training programmes will help to support workforce transformation in the financial sector and to accelerate skills and knowledge transfer to Singaporean talents,” according to a new MAS statement, which was published separately from Menon’s speech.
But given the growth of the fintech sector in Singapore over the past five years, do fintech firms even need government help to meet MAS’s objective of building a “stronger Singaporean fintech talent pipeline”? Recruiters who work with fintechs say the answer is still yes. “There will always be a talent shortage in fintech as the industry is expanding very quickly, especially in the areas of digital innovation and automation through machine learning and artificial intelligence,” says Lim Chai Leng, senior director, banking and financial services, at Randstad.
While fintech companies appeal to candidates wanting to escape the bureaucracy of large banks, they face the same local skills shortages as banks when recruiting in fields such as data analytics, AI and cyber security. “The support from the Singapore government will help accelerate digital transformation and assist in the skills development of the local workforce. It will also further strengthen our digitised economy and intersectoral mobility, further strengthening our fintech capabilities to position ourselves as the region’s fintech hub,” says Lim.
Government support is particularly needed for early-stage start-ups that need to hire and train to make their businesses viable, but lack the resources to do so. “The majority of fintech firms in Singapore operate on a rather lean model and are funded by investors through capital injections or co-funding schemes. These programmes will provide firms with more resources and financial support to grow their workforce to develop innovative products and services,” says Lim.