Finance, fintechs, and the future

Technology is shaping financial jobs and skills; big banks and fintechs will coexist instead of eating up each other

A quick check on job sites for openings in the finance sector invariably yields variations of the following positions: Data analyst, big data analytics engineer, VP, quantitative analytics, project manager, and data management office.

Successful candidates are as often expected to be engineers as much as bankers, with IT skills on top of financial experience.

Is the finance sector looking to hire bankers or engineers?

"Even in legal and compliance, we're looking for engineering skillsets," said Lam Chee Kin, general counsel at DBS Bank, in a discussion panel at the recent German-Singaporean Financial Forum (GSFF): The Future of Banking - Evolution, Revolution or Big Bang  event held at the Singapore Management University.

Mr Lam points out the industry's demand for "technology capabilities, data science capabilities, and the underlying infrastructure-design requirements" but also the need for "design skillsets".

"One of the things we ask is: 'What irritates the customer the most? What irritates our employees the most?' We draw up a long list of these things and we prioritise the top items. For legal, it could be iterative document negotiations.

"We then put lots of resources into (artificial intelligence) to automate document negotiations. That gives rise to a need for design skillsets to shape the employee journey and the customer journey, and how to create the technology infrastructure for it."

"For legal, we don't really need the cutting edge stuff. We don't need 20 people working on the technology, maybe just one or two really good people to design the policy framework, and you can execute it with the existing skillsets," he adds.

Fellow panel member Charis Liau, co-founder and CEO of marketplace lending platform Minterest, describes how her fintech is not necessarily looking for bankers - not the experienced ones, at least.

"What we do is bridge the gap between the companies that are unable to secure necessary funding, and we have a technology process for that," Ms Liau explains, pointing out the wealth of banking experience that the company's management brings to the table.

"As a result, we actually do not need any more bankers. What we are focusing on is customer experience. We are looking for people who are armed with technology skills. We don't need bankers with 20 years of experience to talk to customers anymore, we can hire fresh grads.

"We can even have an intern pool which can ask the same set of questions, and have the same output. Because of the technology, we are putting in place processes to make things a lot faster and more efficient," she adds.


Markus Gnirck, co-founder and CEO of investment advisory fintech tryb, points to a future populated with small financial firms that deliver one single product or service well, instead of banking behemoths that have dominated heretofore.

While acknowledging numerous fintechs that have carved out profitable niches, Deutsche Bank's Rick Striano does not expect big banks to become totally obsolete.

"I see a future scenario where we see fintechs collaborating more and more with banks instead of them competing," Mr Striano, the managing director and head of Digital Product Development within the bank's Global Cash Management department, said.

"Banks have fairly deep pockets and massive distribution channels, lots of clients, and history. The data that comes with that is incredibly valuable. It's just a matter of monetising it."

With regards to fintechs taking customers away from the big banks, Mr Striano said: "Put yourself in the corporate position where you're looking at a lengthy value chain and you're saying: 'Here's the 47 steps to executing the treasury strategy. Do I want to break all this into 47 separate contracts because this company does this one thing better or cheaper than the other?'

"That will happen but at the same time, I don't think the treasurer will want to manage 47 different commercial relationships. It's why we are seeing more collaboration with fintechs where customers are coming to us saying: 'I just found this really interesting company and I would like to use them. Can we access them through you guys?' The balance between the two is where I think the future is going to go."

Bernard Wee, executive director of Prudential Policy at the Monetary Authority of Singapore (MAS), points out that technology has lowered the barrier of entry to finance while observing a lack of attention paid to the resulting business process innovation.

"It's helped e-commerce move in to financial services," Mr Wee elaborates, citing the examples of Alibaba and ride-sharing apps.

"You build adjacencies, and this is where I'm talking about needing people who understand finance, who understand business and not just technology.

"The way e-commerce built adjacencies into financial services is to first provide the marketplace to buy and sell things, then provide you with the payment platform to pay for the things you buy and sell, and lend you money to buy from online merchants or set up an online business.

"There's a lot of evidence outside of e-commmerce that businesses are able to monetise data. Social media has not yet been able to turn itself into a financial service. I'm not saying it won't, and I'm not saying ride-sharing will never become financial services.  There's clearly a business model to lend to people to lease their motorcycles, but it's not clear where the adjacencies would be."

"The logical conclusion is: Is there a limit to where financial services can grow?" he added.


In anticipation of a rapidly-changing landscape, Mr Wee highlights the importance the MAS places on critical thinking and values.

"We describe a situation to them, and get them to respond to suss out the values they hold, and what's important to them."

Johannes Beermann, member of the executive board of the Deutsche Bundesbank, agrees with that approach.

"You need inner values," Mr Beermann said.

"You need to know what is right and what is wrong because just following the compliance system and the regulatory framework is not enough. We as supervisors are sometimes one step behind. Values change, the products change. You need an inner feeling for the customer on what is right or wrong."

"We need people to think differently," Mr Striano added.

"We can teach people the math. Math is easy. It's about philosophy and ethics.  In my view, that makes a difference."

This article was first published on Perspectives@SMU on June 29, 2018.