Building a Ready, Resilient and Relevant Workforce in the Financial Sector

Mr Deputy Speaker, Sir, thank you for this opportunity to raise a current topic of importance. I wish to declare my interest as Co-Chairperson of the Financial Sector Tripartite Committee (FSTC) which was launched a fortnight ago as part of the national SkillsFuture initiative.

Building a ready, resilient and relevant financial sector workforce is of importance because the financial sector is a strong contributor to our economic growth, our productivity growth and our growing influence and impact as a regional and global financial hub and centre. This is further accentuated by the fact that the sector is powered by a 170,000-strong workforce and whose productivity is one of the highest across various sectors and where Professionals, Managers and Executives (PMEs) form the majority of the workforce.

All the recent announcements about layoffs, wage freezes and lacklustre performance of global banking giants in the financial sector have fuelled global and local fears, uncertainties and doubts in the financial sector. This is further exacerbated by the plunge in crude oil prices, currency fluctuations and stock markets at new lows in the first two months of this year which all have ripple effects on the financial sector, whether it is demand on banking, finance, insurance, asset management services as well as stresses on loans and loan repayments.

National retrenchment figures have also crept up in 2015, compared with 2014. At the National Trades Union Congress (NTUC), we are also seeing more PMEs from the financial sector visit our U PME Centre to seek assistance since the last quarter of 2015.

Standard Chartered announced in November last year that it plans to lay off 15,000 workers from its 86,000-strong global workforce by 2018. In Singapore alone, Standard Chartered employs 7,000 workers, many of whom are Singaporeans. HSBC had also announced it would slash 50,000 jobs worldwide through 2017 as part of a global overhaul. Credit Suisse also announced 4,000 job cuts globally after the Swiss bank reported its first annual loss since the Global Financial Crisis just weeks ago. In January, Barclays also had to let go some of its employees as part of its move to exit the global institutional cash equities, equity research and equities capital market businesses. In fact, two weeks ago, I met up with 10 of those who were retrenched in January. I share their worries, fears and concerns.

Why is this happening in the financial sector? There are many answers to that question: too rapid expansion; too high cost of manpower and rent; restructuring and recalibration; product consolidation, hence, the closure of major product lines; technological disruption of financial technology (fintech) and the overall global economic outlook.

These are just some of the reasons why foreign financial institutions are hitting rough patches. Notwithstanding, jobs were being created in the financial industry, especially in growth areas within the sector, such as in the areas of compliance, risk management and information technology (IT).

It is heartening to note from the recent financial results of our three local banks – United Overseas Bank, DBS and Overseas-Chinese Banking Corporation – that they are profitable in 2015 and are still healthy, stable and are reportedly still hiring and not expected to undertake drastic headcount cuts.

Staying ready, resilient and relevant involves not just individuals and workers per se but includes our unions, employers, the Government, regulators and key stakeholders partnering in the journey.

What do we mean by "ready"? "Ready" means that we are prepared for anything that comes our way. It also means we can change and adapt in fluid, volatile, new and changing environment and circumstances.

What does "resilient" mean? It does not mean that a person does not experience difficulty or distress but that he or she has the power and ability to "bounce back" and recover quickly after weathering any challenges or adversity.

"Relevant" means staying abreast and even ahead of current developments and possessing the needed skills, learning and mindset to remain updated, current and both employed and employable.

How to build a 3R workforce in the financial sector? Building a ready, resilient and relevant workforce – a 3R workforce – requires beyond individual efforts to collective efforts by every individual and each of the tripartite partners.

NTUC's Financial and Business Services cluster of unions recently ran a series of focus group sessions and engaged more than 100 employees working in the financial sector from various financial institutions and in various job roles and grades. Workers and unions all agree that the financial sector landscape is changing rapidly.

New jobs are being created with the advent of digital age and disruptive technology. They are what are now called 3G jobs; "3G" meaning "going, going, gone".

Workers in this sector need to stay proactive and positive. Proactive to upskill to move up and stay ahead. Proactive to deep-skill to attain personal mastery. Proactive to reskill if old jobs are gone and new technology and ways of doing things are introduced. Proactive to second-skill themselves in case they need to move out or across to a new job. Positive to embrace change, stay in control and ahead of the challenges coming their way and overcome any adversity.

We want to ensure careers do not plateau because workers have stopped growing, stopped learning and stopped adapting. Unions, too, need to support, assist and encourage fellow workers and secure a positive environment and system for the worker to stay employed and employable. During this time of economic restructuring and transformation and amidst cyclical and structural challenges, besides ensuring that workers in this sector are protected and represented, unions need to strive to stay relevant, progressive and ahead in light of the changing workforce profile and employment landscape. Many in this sector are not aware of the latest and upcoming changes to labour legislation and that PMEs, too, can be union members and enjoy the protection and the entire host of services which NTUC and our affiliated unions can provide.

In the same vein, employers in the financial sector play a vital role in building a 3R workforce. It is imperative for employers to ensure they are progressive in practice and create progression pathways and build the Singaporean Core. Employers need to pay close attention to training, exposure and coaching to equip workers with skills to advance to better jobs. Employers need to motivate and empower more uptake of training opportunities. Employers also need to provide a clear progression path upward for employees who develop and demonstrate skills, capabilities and competencies.

The recent rise in layoffs in the banking sector affects PMEs the hardest. Anecdotally, many of those laid off are the mature, above 40 age group, experienced staff, including some well-performing frontline bankers who met their key performance indicators, yet had to be let go to cut costs. After all, younger, less experienced staff are cheaper to retain on the payroll. These displaced mature PMEs above 40 have families and children to support. Many are locals working in foreign banks.

How is Singapore to develop a resilient core of local talent if the first in line to be retrenched are these mature PMEs, ostensibly because the ones at the top making the decision are anxious to protect their own jobs? Have banks adequately considered the additional risk they potentially face by letting go experienced staff?

Even if employers need to lay off workers, I call out to them to do it fairly and responsibly. We have the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) guidelines on Managing Excess Manpower and the Tripartite Code of Good Industrial Relations Practice which are instructive documents and guidelines on how and what to do before a retrenchment is carried out.

What avenues to exhaust before retrenching? Can we redeploy? Who are to be retrenched? Who are entitled to retrenchment benefits? When should retrenchment exercises be carried out? Amount of retrenchment benefits to be paid to PMEs? How much notice must I give the worker or union? What is good industrial relations practice? What is the industry and market practice? These are questions I hope employers, in particular, those non-unionised ones, will give serious thought to and be fair and progressive in their practices.

Many global businesses are creating jobs of the future at breakneck pace and we need to ensure that Singaporean employees in the financial sector have the right skills to fill them. If you are ready to work, you should be able to find a job that fits your skills. And if you want to move up within your field into a better job, you should have access to training to get the skills you need. For the financial sector, as many are global companies not based in Singapore, to take on bigger roles, we need to provide the much needed regional and international exposure and not just skills alone.

The Government plays a vital role in minimising job mismatch, skills mismatch and expectation mismatch. We should go back to basics. Many of the curricula in finance courses in polytechnics and universities do not really teach banking. We should link our Pre-Employment Training courses with in depth Continuing Education and Training (CET) programmes so that our talent can be job-ready even before they enter the industry. So, if finance majors intend to build a career in banking, their internships should be coupled with certification programmes whilst attached to banks and learn as they earn, and not just limited to polytechnic but also for university students, and taking certification programmes with financial training institutes which are currently offering CET programmes.

Many of our banking talent, too, have become specialists and not given the opportunity to learn about other areas in banking. They are not encouraged to move through different areas or departments. I believe we should have an adult "Earn and Learn" as well. Give our local talent the opportunities to be attached or move across different areas of banking – front office, middle office and back office. And if there are opportunities to take on short-term global projects, do not just give to specialists to be posted for those overseas projects. Let our local talent be given those overseas projects as well and gradually assimilate and progress into the job.

So, with the current letting go of banking talent, can we redeploy the talent displaced to other areas and can they be given "Earn and Learn" opportunities as well? They can be sent for accredited programmes whilst being deployed in areas in the bank or other parts of the bank where they can be utilised.

All said, I am glad to share that, reflecting the spirit of tripartism and as a key SkillsFuture initiative for the financial sector, we have formed last year and recently officially launched the Financial Sector Tripartite Committee (FSTC) which brings together the industry associations, employers, financial cluster unions/Labour Movement and the Government to work in unison to build a common future by fostering a financial workforce that can meet the changing needs of the industry.

As part of the broader SkillsFuture agenda, it is important to equip financial sector professionals with information and knowledge to continuously upgrade themselves and better align their training efforts with their career development.

We will be embarking on the collaboration with the Institute of Banking and Finance (IBF) to continually review the IBF Standards and identify new cross-functional competencies needed, such as in data analytics and risk management. Structured progression pathways will also be developed for evolving job segments, including consumer banking, to encourage continuous learning and upskilling.

FSTC will also set up a financial sector-specific one-stop career advisory facility in April this year, leveraging the U PME Centre's operational experiences and infrastructure at NTUC Centre in One Marina Boulevard. This Financial Industry Career Advisory Centre (FiCAC) will provide guidance to those keen to join the financial industry as well as those looking to move to new jobs within the industry.

MAS, the Association of Banks in Singapore (ABS), IBF, the Singapore Workforce Development Agency (WDA), U PME Centre and NTUC e2i (Employment and Employability Institute) will provide the expertise and resources to support FiCAC in its work. With the support of ABS and U PME Centre, FiCAC will also organise talks on job opportunities in the financial sector.

Mr Deputy Speaker, Sir, in conclusion, to achieve our desired outcome of building a 3R financial sector workforce, one which is ready, resilient and relevant and become co-creators of SG100 and beyond, we need to remind all that the single and collective effort of our tripartite partners is paramount. I urge our tripartite partners to leverage one another's strengths, continue to partner closely to drive our collective efforts for the sector and stay ahead of the game through innovation and shared goals.

It requires not just individual responsibility, proactiveness and initiative by our workers and unions but the conviction, commitment and tenacity of employers to develop their human capital and build a strong Singaporean Core; and finally, strong support, promotion and assistance from the Government, so that we stay on the right course of this journey.

As one of the top financial hubs that thrive in the region, it is crucial for the Singapore financial sector workforce to remain relevant, resilient and ready so as to stay ahead of the competition. The financial sector has to ensure that the workforce continues to enhance its competency level, capabilities and professionalism by acquiring work skills in new or developing business areas, or in developing more sophisticated or specialist skill-sets. Only then can we effectively stay future-ready to serve markets not just locally, but regionally and globally.

Mr Deputy Speaker, Sir, I thank Mr Patrick Tay for his suggestions on our financial workforce. As he mentioned, with sluggish growth in the global economy, coupled with ongoing implementation of the international regulatory reform measures, we are, indeed, seeing consolidation pressures in financial sectors all over the world.

As I had mentioned just now, Singapore is not spared from these forces and consolidation pressures, but the impact on our financial sector has been relatively contained. Even as we see some retrenchments from certain banks, others continue to expand and hire. That is why, as I said, we are still generating, on a net basis, new jobs in the finance sector.

We also see demand for talent in key areas of finance, like asset and wealth management, insurance, compliance and risk management. Looking ahead, we expect to see continued job creation in the financial sector, although at a more moderated pace than before. Over the medium term, we have several plus points in our favour.

The strong pace of urbanisation in Asian cities will spur significant demand for infrastructure development and financing, as well as insurance. There will be growing affluence in Asia with the rising middle class, leading to increased demand for financial services. And as a key financial centre for the region, Singapore stands to benefit from these longer-term trends.

Financial institutions are also increasingly adopting new financial technology, or fintech. Demand is growing for people with competencies in these areas, like cybersecurity, data analytics, application design and development, as well as network and infrastructure. These are areas which Singaporeans can excel in, and secure potentially good jobs in the financial sector.

In the interim, we understand that the changes taking place are a cause for anxiety among affected financial sector workers, especially the mid-career professionals. This is one reason why we have set up FSTC with Mr Patrick Tay as Co-Chairman, to bring together industry associations, the Labour Movement and Government agencies to foster a workforce that can meet the changing needs of the financial industry.

MAS is working very closely with this tripartite committee, NTUC and the financial cluster unions to help and support those who are affected. In particular, individuals can approach a new one-stop career advisory facility for guidance relating to skills upgrading, and career opportunities in finance and beyond. We are setting up processes and mechanisms to help those, especially the mid-career professionals, who are affected. This advisory facility, FiCAC, will be set up in April this year, starting with a focus on the banking sector and it will be extended to insurance and asset management sectors in the near future.

Beyond immediate assistance to those who are affected, we also need to look ahead to the middle term to chart the future skills that are needed for the financial industry and systematically equip Singaporeans with these skills. Mr Patrick Tay had elaborated at length on this; I just want to comment briefly on three areas.

First, as Mr Patrick Tay had suggested, we must get our basics right and make sure that our education system prepares our young people and our potential entrants to the financial sector well for the financial sector.

Mr Patrick Tay mentioned that banking is not taught in polytechnics and universities. I did a check – banking is covered in the modules and curriculums of polytechnics and universities, but I agree that the curriculum can be improved. That is why MAS is working with the Institutes of Higher Learning (IHLs) to enhance the curriculum of existing banking and finance modules, including having more well-structured internships, at both the polytechnic and university levels. In particular, our polytechnic students can look forward to the first Retail Banking Earn and Learn Programme, which will be implemented next year.

Second, we will provide more learning pathways and training opportunities for Singaporean finance professionals at all levels to tap on the SkillsFuture measures and pursue mastery in their respective fields.

MAS is already doing this through various schemes under SkillsFuture. For example, we have the Finance Scholarship Programme (FSP) to support early- and mid-career Singaporeans in developing specialist capabilities. We also recently launched Financial Sector SkillsFuture Study Award which is another channel of financial support to enable individuals to upgrade their skills through a range of programmes.

Looking ahead, we will collaborate with different stakeholders, including IBF and the unions, to review and develop additional programmes needed to upskill industry competencies.

Mr Patrick Tay had suggested that there may be too many of our banking professionals becoming specialists or taking on specialist roles. But, in fact, we need many more Singaporean specialists, in areas like risk management, compliance, wealth management and cybersecurity. We do need more people to go deeper into these specialist areas. We can do various things to nurture them. We can set up new centres of excellence to deepen capabilities and work with employers to develop meaningful career progression for these specialists.

At the same time, while we provide for specialist skills in areas of need, I agree with Mr Patrick Tay that we also need to develop professionals with a sufficient breadth of skills to be flexible and resilient in times of change. This means doing several things. We will need to pre-emptively identify the key jobs that are evolving and develop structured training pathways for professionals. We must identify new cross-functional competencies that may be needed for finance professionals, new competencies like data analytics and digital banking; new competencies that will help our professionals to be more resilient in the future. All these will support continual learning pathways under SkillsFuture and facilitate more seamless transitions for professionals across different areas of finance.

Third, we will continue to work closely with the key financial institutions to build a strong core of Singaporean finance professionals and uphold fair employment practices. This is something that I have talked about in this House at the last Committee of Supply debate. And I mentioned that MAS has been engaging the top leadership of key financial institutions in this area of strengthening the Singaporean Core in our financial sector workforce and ensuring fair employment practices.

The response that we have received from the top leadership of our key financial institutions – many of whom, incidentally, are Singaporeans as well – has been positive. Many of them are taking proactive steps to strengthen their Singaporean talent base. We want to ensure that there are more Singaporeans taking up leadership positions in our key financial institutions. So, MAS works with our financial institutions. We are supporting programmes for Singaporean professionals to be nurtured, for example, by enabling them to take up cross-functional roles within the bank or to take up international postings for better exposure.

These are some of the broad areas that I thought I should highlight and comment on. I am sure the tripartite committee co-chaired by Mr Patrick Tay will be having more detailed deliberations to see how these plans can be enhanced and well implemented on the ground. So, perhaps, next time, Mr Tay can respond to his Adjournment Motion with specific recommendations from the tripartite committee on its plans to improve in many of these areas.

In summary, the Government is stepping up its efforts and Singaporean financial sector workers can look forward to many more new programmes through SkillsFuture. But at the end of the day, a lot of this work comes down to individual mindsets. Everyone must be prepared to do his part.

As Mr Patrick Tay had highlighted correctly, the next decade will be both disruptive and transformative for financial institutions. This will have a significant bearing on the scale and nature of financial sector jobs around the world, including in Singapore. In this period of volatility and change, we must all embrace the desire to keep learning and improving ourselves. We must all have a greater sense of urgency towards reskilling, upskilling and acquiring new skills.

Mr Deputy Speaker, Sir, MAS is committed to working with the industry, NTUC and our unions to build a ready, resilient and relevant workforce in the financial sector.

*Question put, and agreed to.*

*Resolved, "That Parliament do now adjourn."*

Adjourned accordingly at 7.22 pm.