Published Date: 19 October 2023

Speech by Mr Heng Swee Keat, Deputy Prime Minister and Coordinating Minister for Economic Policies, at the Institute of Banking and Finance (IBF) Distinction Evening on 19 October 2023

Mr Ravi Menon, Chairman of the Council of the Institute of Banking and Finance,
Mr Ng Nam Sin, Chief Executive Officer of the Institute of Banking and Finance,
Ladies and gentlemen,

Good evening. I am delighted to be here this evening to celebrate the important work of the Institute of Banking and Finance, or IBF, and recognise the contributions of your partners in strengthening Singapore’s financial sector.

Over the course of my career, including as Managing Director of the MAS and Minister for Finance, I have worked on Singapore’s responses to crises such as the Asian Financial Crisis in the late 1990s, the Global Financial Crisis in the late 2000s, and most recently the COVID-19 pandemic.

Through these experiences, I have seen firsthand the fundamental role played by the financial sector in the growth and development of the real economy, and in meeting current and future needs, as well as urgent and long-term needs.

To do so effectively, the financial sector must have an honest, reliable and capable workforce.

Established in 1974, IBF has supported building up the competencies of Singapore’s financial professionals. In doing so, it has also contributed to the wider Singapore growth story.

Today, Singapore’s financial sector is mature, diversified, and well-reputed internationally. In fact I just visited New York and Boston and was very cheered by the many warm comments I received about Singapore and our financial sector during my time there.

Financial services today accounts for 14% of our GDP, and the sector employs around 190,000 people – or around 5% of our total labour force.

The scope and complexity of Singapore’s financial sector have expanded considerably over the decades.

From humble beginnings as an Asian Dollar Market in the 1960s, the sector has evolved to become a global financial marketplace that offers a broad and integrated suite of financial services.

Despite the global disruptions and headwinds of recent years, Singapore’s financial sector also remains resilient and has continued to grow.

Between 2020 and 2022, the sector saw an average real value-added growth rate of 5.2% and created 5,700 net jobs annually.

This reflects the high level of trust and integrity associated with the sector and its institutions and people, and more broadly with Singapore as a stable jurisdiction with strong rule of law.

Just as importantly, as Singapore deepened our offerings as a node within the global financial system, we also built up a deeply skilled and adaptable workforce in the sector with a strong Singapore core.

Locals comprise over 80% of the financial sector workforce, complemented by a diverse pool of strong talent drawn from around the world.

This focus on human resource development underscores Singapore’s long-standing national belief that our competitive edge lies in developing a broad and deep bench of talent.

IBF has been a valued partner in this regard.

Alongside MAS and industry partners, IBF has been at the forefront of upskilling, reskilling, and developing talent to grow the financial sector in an inclusive and forward-leaning way.

Over the past two years, for example, as you heard from Nam Sin, IBF has supported 72,000 professionals annually via IBF Training Schemes and enabled more than 5,000 at-risk financial sector workers to shift to new and expanded job roles.

IBF has also partnered financial institutions in Singapore to build up a pipeline of young talent and financial specialists, as well as nurture a capable pool of future leaders for the financial sector.

Indeed, IBF’s long-standing mission has been, I quote, to “empower financial practitioners with capabilities for a robust Asian financial industry”.

This is still relevant as Asia continues to have strong growth prospects.

The International Monetary Fund estimates that Asia will reach 4.6% and 4.2% growth in 2023 and 2024 respectively, higher than the global growth estimate of 3%.

As I mentioned earlier, the financial sector has a powerful catalytic role in unlocking and accelerating this growth potential for the broad benefit of the region’s populations.

Against this backdrop, it is worth considering how IBF can contextualise this evergreen mission for the current state of the world. In other words, what does a “robust Asian financial industry” mean today?

There are three broad drivers that I believe will reshape our financial sector in the coming years.

We should centre our financial sector workforce development around these three areas to truly make the most of the growth trends ahead.

Since many of us here come from a finance and economics background, let me elaborate briefly using the acronym that all of you are familiar with - “G-D-P”.

First, “G” for Green.

Climate change is a defining existential challenge of our time, and we need to take urgent action in accelerating Asia’s transition to net-zero.

Collectively, the emerging economies of Asia are critical to achieving an overall global green transition and will be a key climate battleground for the next decade.

By prioritising sustainability in the next phase of developing our financial sector, we can contribute to global prosperity while protecting our planet.

The green transition will not be straightforward – there are new opportunities as well as new risks.

New technologies and solutions are evolving rapidly, but this should not hold us back from investing in viable solutions early before we reach a tipping point.

Moreover, incentives for regional economies must be aligned across the policy and finance domains.

A financing gap is already evident across Asia for countries to achieve their emissions reduction and sustainability targets.

Estimates show that $3.1 trillion of annual investment is needed in Asia to reach net zero. This is about $1 trillion more than current level of investment.

Financial institutions will need to integrate sustainability considerations across operations.

This will entail additional business demands and increased complexity of tasks – for example in developing new investment products and ESG toolkits/verification mechanisms.

Singapore’s financial sector can support the regional net-zero transition proactively. I am heartened to see many financial institutions here establishing dedicated sustainability teams performing specialised functions such as sustainability advisory, risk analysis and management, and product development.

Second, “D” for digital.

Digitalisation in finance has enabled greater access and inclusion, convenience, and efficiencies for emerging economies, businesses and individuals. This is particularly important in Asia.

Tellingly, the technology workforce in Singapore’s financial sector has grown by more than 30% in the past 2 years, to reach around 34,000 as of end-2022.

Technology will continue to transform the financial sector both in Singapore and globally. In particular, we are beginning to witness the potential impact of Generative Artificial Intelligence, or Generative AI, on finance.

Financial institutions have begun to explore using Generative AI to write codes, draft loans and legal documents, and conduct compliance monitoring and assessments.

MAS, as the Central Bank and sector regulator, is also exploring Generative AI’s potential.

For example, MAS has launched Project MindForge which brings data resources in the banking sector together with state-of-the-art AI technologies and advanced algorithms to assemble use case studies, prototypes and pilots to aid in the learning and translation process.

Third, “P” for philanthropy.

The rising wealth creation in Asia has generated new opportunities and channels for the purposeful deployment of capital in ways that achieve lasting financial and social impact.

In Singapore, for example, we have seen significant growth in the community of Single Family Offices – from just 400 receiving MAS tax incentives in 2020, to more than 1,100 as of 2022.

These Family Offices tend to take a more long-term and patient stance towards investments.

This can be especially helpful in funding innovation to address global challenges like climate change, including facilitating the green transition and sustainable, inclusive growth.

It is therefore important for our financial sector workforce to have the capability to promote philanthropy and impact investing, to achieve social impact and uplift those with needs.

This will also help to strengthen cohesion across groups in society.

I am pleased to see IBF taking the lead again in preparing the sector for the next bound of transformation and opportunities.

Since 2020, MAS and IBF have together launched 3 new skills maps for Family Office advisors to deepen specialist skillsets to better serve Singapore’s growing Family Office ecosystem.

These include skills in wealth planning administration, philanthropy advisory and corporate governance.

These skills maps have also expanded career pathways and developmental opportunities for wealth management professionals.

Similarly, MAS and IBF, supported by Workforce Singapore, are also studying how green and digital trends will impact jobs and skills in Singapore’s financial sector, and putting together roadmaps on how we can position our financial sector workforce to capture new opportunities while minimising risks.

In particular, a study is ongoing to understand how job roles and tasks will evolve as a result of sustainable finance trends, as well as to set out new skillsets that finance professionals need to acquire to perform these augmented roles effectively.

Preliminary findings suggest that the majority of jobs will have to be augmented by upskilling to support changes in regulations, products and processes to better serve their clients. In addition, there will be new highly specialised roles created such as in sustainability risk analysts and carbon credit traders.

MAS and IBF are also looking into a study to better understand how Generative AI will transform the financial sector, including areas in which it will be deployed and the corresponding timeframe.

This will shed insights on its impact on jobs in the sector, including how the workforce will need to be upskilled and reskilled to perform new and augmented roles.

Besides IBF, various stakeholders in the ecosystem have contributed strongly to enhancing the professionalism and competitiveness of Singapore’s financial sector.

This multi-stakeholder approach – of partnerships between government and industry – has helped Singapore maintain our competitive edge as an international financial centre.

I am therefore pleased that we are recognising partners who have taken action to develop our professionals.

Citibank, DBS, OCBC, Standard Chartered, and UOB will be receiving Workforce Singapore’s Most Valuable Advocate Award for collectively reskilling and redeploying more than 4,000 of their employees since 2017.

Prudential and UBS will receive Workforce Singapore’s Technology in Finance Immersion Programme (TFIP) Emplacement Excellence Award for emplacing more than 80% of their trainees into full-time positions from 2019 to 2021.

Manulife Singapore, OCBC and Prudential are also receiving the IBF Inspire Award, and Goldman Sachs will receive the IBF Advance Award, for accelerating the professional growth of their workforces and driving upskilling efforts alongside technology adoption.

Beyond organisations, it also boils down to individual leaders to prioritise reskilling and to lead by example.

Tonight I am pleased to help recognise 7 exemplary leaders as IBF Distinguished Fellows, for being role models and working on industry-wide projects and committees.

Congratulations to Ms Jenny Sofian, Mr David Alan Martin, Mr Jamil Ahmed, Ms So Lay Hua, Mr Marcus Christoph Haushofer, Mr Wong Kee Joo and Mr Ng Peng Khim for your service to the sector.

You are all good role models who will inspire others to nurture the next generation and develop talent to their fullest potential.

In closing, IBF sits on the cusp of your Golden Jubilee, next year.

For close to 50 years, IBF has helped to forge collaborations and partnerships that have strengthened Singapore’s financial sector.

This has had tangible positive impact domestically as well as within the wider region.

As we celebrate IBF’s achievements, we should also cast our eyes to the future to position Singapore well.

Let me take this opportunity to also express our collective thanks to Mr Ravi Menon, who is stepping down as IBF Chairman at the end of this year.

Ravi’s visionary leadership over the past 12 years has shaped and enriched IBF’s efforts to deepen Singapore’s financial sector talent pool and make the workforce more resilient and future-ready. So thank you Ravi.

We must continue to build on this strong momentum to make the most of the opportunities that lie ahead of us.

I look forward to IBF, MAS and industry leaders continuing to partner to develop our talent in the financial sector to the highest standards so as to help build a more prosperous, resilient Asia.

Congratulations again to all award recipients, and I wish you a wonderful evening. Thank you.