Salaries in Asia Pacific’s banking sector are set to grow by 4.8 percent in 2017, the second slowest rate of salary growth among industry sectors in the survey. Eleven of the markets in the region have banking pay increases, ranked among the bottom three in cross-industry comparison. Singapore’s banking sector is set to grow by 3 percent in 2017, the slowest rate of salary growth of all the industry sectors in the survey. Rates are also lower than the regional average of 4.8 percent.
A combination of fresh salary budget data for the coming year and industry sector feedback points to a shortage of tech talent in the financial sector is helping salary budgets for talent in digital roles hold steady amid broader weakness across other industries, particularly the banking sector, according to leading global advisory, broking and solutions company Willis Towers Watson.
Business in all its forms is becoming more data and technology-driven and banking is no exception – increasingly it’s a fusion of finance and technology. In the competition for talent, it is technology rather than finance that increasingly holds sway. That’s where the shortage lies. The pressure point that’s holding tech salaries steady while others slide.
Survey findings released today by Willis Towers Watson, drawn from 2016 Asia Pacific Salary Budget Planning Report, show banking salary budget increases for 2017 are set to be well below those in the tech sector, and also below those of the financial services sector as a whole.
“The data, allied with what we’re hearing on-the-ground, shows that as traditional banks move services online in the hope of staying competitive, by better meeting customers’ evolving demands via digital transformation, they are competing for the same pool of skills as the traditional high-tech sector,” said Sambhav Rakyan, Data Services Practice Leader, Asia Pacific, at Willis Towers Watson.
High tech salaries in Singapore are predicted to grow at a faster pace than banking. The industry is expected to see growth rates of 4 percent, on par with Hong Kong, but lagging behind China at 7.5 percent.
Hong Kong, Singapore Tech Salary Rises to Outstrip Banking
Banking salaries in the financial hubs of China, Hong Kong and Singapore are projected to grow by 6.3 percent, 3.6 percent and 3 percent respectively in 2017, well below the expected high-tech salary growth rates of 7.5 percent for China and 4 percent for both Hong Kong and Singapore.
“What the data is telling us is that, amid a general slowdown in the banking sector and more broadly across the financial services sector, salaries for digital roles within the financial sector are holding steady,” Rakyan said. “It doesn’t mean tech talent will necessarily get more in a monetary sense, but it does in percentage terms.”
Unlike pre-financial crisis times, banking no longer stands alone as the industry of choice amongst top-tier University graduates, according to Greg Kuczaj, Asia Pacific Head of Willis Towers Watson’s Global Financial Services practice. “There is continued attraction and retention pressure from non-financial services firms, such as those in high tech or fintech, as the pay premium in financial services has decreased to where it is no longer a major attraction,” said Kuczaj.
Even at mid and senior-level positions, technology firms are increasingly attracting key talent away from the financial services industry due to less regulation and scrutiny in the high tech industry, more innovative and entrepreneurial work environments, and highly competitive total rewards packages.
Demand for Tech and Digital Talent Evident across Industries
Demand for tech and digital talent is evident elsewhere in the region across many industries. As banks move online and adopt mobile solutions, insurance companies are also adopting wearable devices and data analytics technology to tailor policies, pushing Insurtech salaries higher. Other areas competing for digital talent include Fintech, online-to-offline (O2O) and e-commerce.
“In China, Beijing has been pushing entrepreneurship as a cornerstone of its economic restructuring. Digitalisation plays a significant role in this as key element for an effective entrepreneurship ecosystem,” said Kuczaj. “It’s similar in India with the government-backed ‘Made-in-India’ campaign. India is also home to a huge e-commerce and taxi-hailing market, creating very high demand for talent in mobile payment technology and data analytics.”
Digital transformation means there’s a need to review and redefine the talent strategy to identify key skills and differentiate compensation for talent in key roles.
“In Silicon Valley, for example, top talent is often rewarded with equity in addition to a competitive base salary and annual bonus. It’s very compelling,” Kuczaj added. “To truly compete, financial services firms will need to think beyond merely using pay to attract and retain talent. Career opportunities, organisational reputation, security and manager/leadership effectiveness are all critical drivers of attraction and retention.”