Source: Willis Towers Watson. Report cover.
The financial sector, particularly in digital roles, is experiencing salary stability due to a high demand for tech professionals. This trend persists despite overall economic weakness in other industries, including banking, according to the global advisory firm Willis Towers Watson.
Businesses across all sectors are becoming progressively reliant on data and technology, and the banking industry is no exception. This shift has resulted in a talent competition where technological expertise is more valuable than financial background. Willis Towers Watson’s 2016 Asia Pacific Salary Budget Planning Report reveals that projected salary increases in the banking sector for 2017 are significantly lower than those in the tech industry and the overall financial services sector.
The report indicates that salaries in the Asia Pacific banking sector are expected to rise by 4.8% in 2017, the second lowest growth rate among industries surveyed. When compared across industries, eleven markets in the region rank banking salary increases among the bottom three.
Sambhav Rakyan, Data Services Practice Leader, Asia Pacific, at Willis Towers Watson, explains, “As traditional banks transition their services online to remain competitive and meet evolving customer needs through digital transformation, they find themselves vying for the same talent pool as the established high-tech sector.”
Projected salary growth in the financial centers of mainland China, Hong Kong, and Singapore for 2017 are 6.3%, 3.6%, and 3% respectively, significantly lower than anticipated high-tech salary growth rates of 7.5% in China and 4% in both Hong Kong and Singapore.
Rakyan observes, “Despite a general slowdown in the banking and broader financial services sectors, salaries for digital roles within finance are holding steady. This doesn’t necessarily translate to higher monetary compensation for tech professionals, but it indicates a stable percentage increase.”
Greg Kuczaj, Asia Pacific Head of Willis Towers Watson’s Global Financial Services practice, notes that unlike the pre-financial crisis era, banking is no longer the top career choice for elite university graduates. “Competition from non-financial services firms, especially those in high tech or fintech, continues to impact attraction and retention as the pay premium in financial services has diminished and is no longer a primary draw,” Kuczaj states.
The appeal of technology companies extends to mid- and senior-level positions, drawing talent away from financial services with promises of reduced regulation and scrutiny, more innovative and entrepreneurial work environments, and highly competitive compensation packages.
Willis Towers Watson emphasizes that the demand for tech and digital skills is widespread across various industries in the region. As banks embrace online and mobile solutions, insurance companies are incorporating wearable devices and data analytics to personalize policies, driving up insurtech salaries. Fintech, online-to-offline (O2O), and e-commerce are other sectors vying for digital talent.
“China’s government has prioritized entrepreneurship as a pillar of its economic restructuring, with digitalization playing a crucial role in fostering an effective entrepreneurial ecosystem,” explains Kuczaj. “A similar trend is evident in India with the government-supported ‘Make-in-India’ campaign. India’s substantial e-commerce and ride-hailing market further fuels the demand for talent in mobile payment technology and data analytics.”
The digital transformation necessitates a reevaluation and redesign of talent acquisition strategies to pinpoint essential skills and differentiate compensation for key roles.
“Silicon Valley, for instance, often rewards top talent with equity alongside competitive base salaries and annual bonuses, making it a very attractive proposition,” Kuczaj points out. “To compete effectively, financial services firms need to move beyond solely using compensation as a tool for attracting and retaining talent. Career advancement opportunities, organizational reputation, job security, and strong management/leadership are all crucial factors influencing attraction and retention.”
Interested?
*The 2016 Asia Pacific Salary Budget Planning Report is a bi-annual survey compiled by Willis Towers Watson’s Data Services Practice. The survey, timed to coincide with companies’ compensation planning for 2017, looks at a range of industry sectors and job grades from factory shop floor to executive suite, and focuses on salary movement and review practices.
The survey was conducted in July 2016. Approximately 4,000 responses were received from companies across 22 markets in Asia Pacific.