Transport Minister and board member of the Monetary Authority of Singapore (MAS) Ong Ye Kung tackled the issue of foreign manpower in the financial services.

He was speaking at the Debate on the President's Address on September 1.

Ong's speech comes on the heels of the Ministry of Manpower's (MOM) recent announcement that the minimum qualifying salary for Employment Pass candidates in the financial services sector will be raised to $5,000 for new applications, starting December 1, 2020.

The financial sector is a "bright spot in a Covid-19 stricken economy" said Ong. While Singapore now occupies a place in the world of global finance, our current challenge is to defend and grow our position against tough global competition.

How our time zone gave us an advantage

Ong started off with a short, but interesting history lesson on how Singapore kickstarted her journey to become a global financial hub -- with a "simple but powerful insight" in the 1960s.

"Due to our time zone, we could seamlessly bridge East and West, to facilitate US dollar transactions after the New York market closed, before London opened. This became the Asian Dollar Market (ADM), which grew into a vibrant activity in Singapore."

The earliest banks that came to Singapore to operate in the Asian Dollar Market were foreign banks like the Bank of America. These foreign financial institutions trained a pipeline of Singaporean talent, said Ong.

Even today, Singapore has become a top international wealth management centre because we attracted a critical mass of global players to overcome our lack of knowledge, expertise, and networks.

Ong gave the example of UBS who employs close to 3,000 employees, of whom 60 per cent are Singaporeans. It has also instituted training programmes to develop local talent.

22,000 finance sector jobs created in past 5 years

In a nutshell, this is Singapore' strategy: Bring in new activities, develop new capabilities, inject foreign expertise in the build-up phase, and grow our own local talent pool before taking on more roles in multinational teams.

This is also the approach that Singapore is taking with FinTech and Green Finance, said Ong, which has led to new jobs for Singaporeans.

"About 22,000 financial sector jobs were created over the past five years, with 15,000 going to Singaporeans. There are also positive spillovers, contributing to jobs in the legal and accountancy fields, many of which go to Singaporeans."

Despite the benefits that come with being a global financial centre, Ong acknowledged that foreign manpower remains a concerns for Singaporeans.

Before he delved into the issue, Ong provided some statistics for the financial sector.

70 per cent of the workforce are Singaporeans, 14 per cent are PRs, and 16 per cent are work pass holders.

When it comes to senior roles, Singaporeans account for 44 per cent, with PRs 20 per cent and work pass holders 36 per cent.

Not a zero-sum game

There is a higher share of foreigners in senior roles due to the international component of activities that we have in our financial centre. These roles tend to be more internationally diverse.

"But this does not mean that Singaporeans are getting the short end of the stick, because this is not a zero-sum game," said Ong. This is because of two reasons.

Firstly, while the share of Singaporeans in senior roles has remained steady, the absolute number of Singaporeans in senior roles has increased from 1,700 to 2,600 in five years. That is more than a 50 per cent increase.

Secondly, Singaporeans gain precious global and regional expertise from foreign manpower which will prepare them to assume senior management roles.

More can be done to create opportunities

Still, Ong said that more can be done to create opportunities for Singaporeans in the financial sector to groom them into leaders and specialists.

He highlighted the Finance Associate Management Scheme, which which supports financial institutions to hire and groom Singaporeans, as well as the International Postings (iPost) scheme, which incentivises financial institutions to send Singaporeans for international exposure.

Ong added that MAS is working on these.

Assuring Singaporeans that these concerns raised are valid, Ong said that while Singapore is gaining the largest chunk of jobs in the finance sector, competition is relentless and we cannot take this position for granted.

"So this is not about growth at all costs, or accepting ‘trade-offs’ for the sake of growth, but about whether as a people we can strengthen our place in the financial world, hold our own, develop the expertise, seize the opportunities, to make Singaporean lives better."

Top photos credit: Aditya Chinchure on Unsplash and Ong Ye Kung/Facebook.