Singaporeans Employed in Financial Services Sector

Mr Speaker, Sir, I have provided most of the data Mr Chua asked for in my speech on the financial sector on 1 September 2020, but let me do a recap here.

The Monetary Authority of Singapore or MAS started compiling detailed manpower data in the sector in the last few years. Total employment in the sector grew from 149,000 in 2014 to 171,000 in 2019. So, about 22,000 financial sector jobs were created over the past five years, with 15,000 going to Singaporeans. Based on MAS' estimates, about 70% of the workforce are Singaporeans, 14% Permanent Residents or PRs, and 16% foreigners.

If we zoom in on senior roles, Singaporeans account for 44%, PRs 20% and foreigners 36%.

The proportions vary across activities. In 2019, for senior roles in retail banks' local functions, Singaporeans accounted for about 70%. In non-retail banks, where there is a higher concentration of regional and global functions, the proportion is lower. Singaporeans accounted for about 40%.

But as I have explained, while the share remains stable, the absolute number of Singaporeans holding senior level positions has been growing at a healthy pace as the base has expanded. Two thousand six hundred Singaporeans now hold such positions, 900 more than five years ago. That means an increase of 50% by absolute numbers.

The Member has asked for a comparison of 25th, 50th and 75th percentile salaries of Singaporeans, PRs and foreigners in the financial services sector. However, such a breakdown would not be meaningful, as we are not comparing like for like. A foreigner at the 50th percentile of foreigner's wage level in the financial sector could be hired for a very different role, from a Singaporean at the 50th percentile of the Singaporean wage level.

Notwithstanding, let me try to address the Member's queries by taking a broader view of the data, while taking care of the interpretation.

Across the financial sector, the median wage band of Singaporeans – because we collect the data by wage bands – the median wage band of Singaporeans is $6,000 to $8,000 monthly wage. While that for PRs and foreigners, they are similar, at the band of $8,000 to $10,000. In the senior level positions, about half of Singaporeans earn above $30,000 per month. It is the same for foreigners, while almost two thirds of PRs in the senior positions do.

Both sets of data are as one would expect. Financial institutions very often bring in higher earning foreigners to perform specialised, or regional and global roles, and our rules constrain the flow of those who come in at the lower level. One would also expect those with stronger profiles and track records in Singapore to become more successful in attaining PR status.

In other words, these data show outcomes which reflect the fact that we regulate the inflow of foreigners and apply selective criteria in granting PR from those who were previously foreign PMEs. If there was no regulation to control the inflow of Employment Pass holders and no criteria and conditions for PRs based on their track records, these earning differentials will naturally narrow or disappear.

We should focus our minds instead on the essential issue, which is how we can provide the best opportunities for Singaporeans. As I explained in my speech earlier this week, we do this by staying open to the expertise that we need to grow as a global financial centre, investing in Singaporeans’ capabilities at every level and by ensuring fair employment practices amongst financial institutions.

MAS has been building our local talent pipeline for the financial sector and grooming more Singaporeans to be leaders and specialists, including giving them international exposure. Our local talent pool has been expanding and we will continue to collaborate and work with the industry to continue this effort.

Mr Speaker, I declare my interest as an employee of a financial institution here in Singapore. I would like to ask a clarification to the Minister. In terms of the proportion of Singaporeans, I think it was 70% of the financial services workforce, 44% in senior roles and this has been relatively stable over the past years. I would like to ask if the Government or MAS has undertaken a study to assess why is it that, given the history of Singapore's status as a financial centre, why is it that more Singaporeans are not moving up to the senior roles and in terms of where do we want to be in terms of the strong Singaporean Core? Would MAS or the Government have a specific level they have in mind?

In relation to that, I also understand from the Minister's speech that there is the Finance Associate Management Scheme to groom young undergraduates and Singaporeans. How about in terms of supporting the middle management across the various spectrum, to support them into these senior roles?

Mr Speaker, Mr Chua may not have heard my speech properly earlier this week and may not have heard my reply properly. He asked why is it that not more Singaporeans are moving up to senior position roles. That was exactly what I was trying to explain that, indeed, more Singaporeans have been moving up. The percentage has not been moving – maybe that is why the Member misunderstood. The percentage stayed at about 44%. But the base has grown. As a result, the absolute number of Singaporeans that moved up to senior roles have increased.

In my reply just now, I should have mentioned, it is not just Singaporeans taking up these senior roles here. They are now also going out, taking up senior roles overseas. I gave some examples during my speech.

We are able to do all this only because we continued to bring in expertise; at the same time, work with financial institutions, invest in our local expertise, grow our own timber. That is the way that we grow the sector and when the sector grows, there will be more opportunities. Singaporeans are holding our own and taking and seizing some of these opportunities.

So, the Member's second question, how do we support middle management in moving up, is exactly what we need to do. Grow the sector. If we keep saying, "Let's just be a pond. Shut ourselves out from the lagoon and the lagoon shuts itself out from the sea", then we will always be a small pond. You can develop your middle management to take up senior positions, but your market will be small.

Let us take a different approach. Be open to the world, make ourselves that global financial centre, work with the financial institutions, invest in our people. Then, I think middle management can move up to take up senior positions.