Addressing the new skills gap in Southeast Asia financial services

For companies facing a digital skills gap, it’s no longer a question of “why” they should invest in continuous up- and re-skilling of their workforces, but “how”. Providing there is also backing from Governments and regulators, companies which are implementing continuous learning processes are the ones most likely to
remain resilient despite economic headwinds.n the past few months, the pandemic has accelerated the digital transformation of all industries, and, in particular, finance. 

The financial services industry has undergone a transformation over the past decade, with new “platform” business models and technologies such as Al and Blockchain dramatically changing workforce needs. To put it into context, Fintech companies, which represented a negligible number of jobs 10 years ago, now employ more than 300,000 people, the same as the number of total finance professionals in a global hub such as London.

This pace of change has created a real gap across industry knowledge and mindset for a very large part of the financial services workforce. While a decade ago the industry would have expected Excel as a core skill, understanding Machine Learning has become a core skill for the present day – one which very few possess.

Southeast Asia is a vast region with a large, urbanising, yet underbanked population – cash has been a dominant feature of everyday life. While dramatic increase in SEA digital financial services is anticipated to grow the sector to US$38bn in 2025, there are several specific challenges, which the region is facing.

The Southeast Asian economy is significantly driven by small and medium enterprises (SMEs), accounting for nearly two thirds of the workforce. But while there’s exciting growth opportunities, the current workforce in SEA cannot fulfil the level of digital transformation required in the market for several reasons.
Firstly, informal workers, which account for a large portion of the Southeast Asian workforce, do not have access to upskill themselves and absorb the latest knowledge in this ever changing industry. In some countries, the lack of government support also enlarges the workforce gap in the financial market. With the lack of incentives, some companies do not have enough funds to invest in human capital. However, it is important to highlight that countries like Singapore are doing a lot to upskill their workforce.

In the case of financial institutions, we also observe affecting factors such as outdated corporate culture, the number of companies struggling to keep pace with customer expectations, and how many are having significant difficulty adapting to hybrid working models and the needs of a distributed workforce. The latter point is coupled with the fact that many SEA financial institutions are still in the incremental stage of tech transformation and are less advanced in their transformation journey compared to their counterparts globally. So what can be done? For one, governments and regulators can lead the line in creating programmes aligned with the required skills of the workforce. We believe adult education, retraining, upskilling and reskilling should be at the centre of the conversation. Through these approaches, individuals can enhance their adaptability to the digital era and fast-changing industry.

But before that, current workforces must be analysed and the required new skills identified before this upskilling of workforces and companies can commence. This is where I would like to emphasise the importance of the role of governments, who have the responsibility and resources to ensure their citizens are prepared for the future of work. This could be done via government subsidies for workers to enrol in online courses provided by third parties, thus making upskilling both more affordable and attractive to its workforce. Another format could be to co-create programmes between third parties and governmental training arms. The government’s participation ensures the resulting upskilling programmes are needed within a particular workforce, while also being familiar with regulation and policy considerations.

Lastly, individual companies must do their equal part and invest in talent development. In the case of Fintech, the companies attracting the best talent are those clear on job descriptions, mission/purpose, have a fast recruitment cycle, retain employees through a focus on innovation and allow top performers opportunities to build up their skills portfolio. Such an approach is garnering so much success that traditional financial institutions are employing the same structure and job roles found in Fintech when recruiting. For companies facing a digital skills gap, it’s no longer a question of “why” they should invest in continuous up- and re-skilling of their workforces, but “how”. Providing there is also backing from Governments and regulators, companies which are implementing continuous learning processes are the ones most likely to remain resilient despite economic headwinds.

Tram Anh Nguyen, CFTE Co-Founder.

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