While the Monetary Authority of Singapore assesses 21 applications for its digital banking licenses, there is much debate within the finance community. The focus? Where is the increasing impact of technology leading us, and can established banks keep pace? One sign that the balance may indeed be shifting is the increasing number of banking executives changing jobs. Many are finding their way into the employ of Singapore's leading fintech (financial technology) companies.
The migration of senior bankers to tech firms is nothing new in Singapore. As far back as 2017 the press reported on the finance industry's struggle to attract top talent. This only increased, as tech firms like Google, Facebook, Microsoft, and Amazon, in particular, continued to climb up the list of ideal employer rankings. What is new is the extent to which technology companies are penetrating financial services.
What began as a flurry of startup companies in payments has now snowballed into a barrage of well-funded fintech platforms. They now cover almost every element of financial services. These include retail banking (Grab), e-wallets (Razer), local payments (Rapyd), investment management (Stashaway), insurance (Singapore Life), commercial banking (Aspire, Arival Bank), robo-advisors (Bambu), and most recently, trade finance (dltledgers).
These companies are growing quickly – many on the back of significant, recent, venture capital investment. According to a report released by Accenture, Singapore-based fintech firms raised more in the first nine months of 2019 (a record US$735 million (S$1 billion)) than in all of 2018 (US$642 million). It is perhaps no coincidence. These businesses all fit broadly within the Singapore government's vision for a future economy built on intellectual property and fintech, alongside other "deep tech" industries like biotech, quantum computing, and robotics.
With this amplification in funding and attention, perhaps not surprisingly, comes an acceleration in the shift of senior talent. The direction? Often away from traditional banking institutions and towards startups. In fact, government initiatives, such as [email protected] may be contributing. This is a pilot programme by the Economic Development Board (EDB) and trade promotion agency Enterprise Singapore, which is specifically designed to help "high-potential" technology companies to attract talent.
Nikhil Joshi, CFO and COO at dltledgers
What is more, the trend can be seen at all levels of seniority. Technology companies are snapping up the brightest minds at all levels, in particular for mid- and senior-level positions. Recent high-profile appointments include Razer Fintech's appointment of Neal Cross, in December 2019, to its board advisors. Cross previously headed up innovation at DBS – "the world's best digital bank". He is also perhaps best known for being named the world's most disruptive CIO/CTO, by a panel that included Apple co-founder, Steve Wozniak, and Virgin Group founder, Sir Richard Branson. The announcement of Cross joining Razer came only shortly after Société Générale director, Jason Tay, joined Singapore-based currency conversion platform, M-DAQ. At almost the same time M-DAQ doubled its valuation to $500m.
Most recently, Nikhil Joshi, who was responsible for strategic and economic decision-making as Business Manager at Barclays, APAC, announced a move to dltledgers. One of Singapore's fastest-growing startups, dltledgers is perhaps the first, globally, to bring the benefits of blockchain, successfully, to the world's largest corporates and cross-border traders. Mr Joshi's experience with complex transactions across credit, equity and FICC asset classes, specifically in relation to balance sheet and regulatory capital, demonstrates how Singapore's fintech ecosystem has diverged a long way from its simple beginnings.
Tip of the Iceberg
According to Tushar Tejuja, these are far from isolated examples. Mr Tejuja is Managing Director of Singapore-based HR tech startup, HackerTrail, which is focussed on recruitment within technology. He said:
"At HackerTrail we've seen a huge increase in appetite for fintech among senior banking professionals. Not long ago a career in Singapore's banking sector was seen as the ultimate goal. Now we see quite the opposite. Despite the finance sector's investment in innovation, many bank employees tell us that, given the constraints caused by legacy infrastructure, compliance, and bureaucracy, it is difficult – if not impossible – for them to compete with the more agile, well-funded, and flexible fintech firms. It is literally a case of 'if you can’t beat them, join them'. In fact, in many cases we see candidates accepting significantly smaller packages to join what they see as a fintech revolution."
There are 150 banks in Singapore, with a total asset size of nearly $2 trillion. To foster innovation and stay relevant, many of these banks operate fintech-focused investment funds and accelerators. This is true of all three of the dominant local banks – DBS Innovates, The Open Vault at OCBC, and UOB. Others are finding new ways to compete, such as by forming partnerships with major, local e-commerce players. This gives them access to the millions of consumers using these platforms daily. Others are less worried. Several leading banking figures have spoken publicly about so-called "disruptors", and how the banks are well prepared for their impact. How extensively this will influence Singapore's business world is yet to be seen.
For more information about dltledgers, please visit dlt.sg.
- Founded in January 2018, dltledgers' blockchain-powered trade platform enables companies to connect different parties within their supply chain and/or trading network. By doing so, they can digitalise trade processes and financing documentation with banks and trade finance providers. Between the launch of the platform in October 2018 and the time of writing, approximately S$3 billion of live trade finance transactions have been executed. So far, over 390 traders and more than 45 banks are onboard. dltledgers has enabled its customers to reduce trade execution times from 45+ days to a matter of hours, lowering operational overheads and improving the working capital lifecycle by up to 80%.
- dltledgers raised $2.5m in an investment round led by Walden International in 2019. The company is in the process of preparing for a significant investment round, and has already received term sheets from well-known investors.
- Customers include Shiseido, IFFCO, Agrocorp, Wipro Unza, and many more.
- Partners include DBS Bank, Africa's Trade and Development Bank, Standard Chartered Bank, Microsoft, SAP, and Google.
- HackerTrail is a Singapore-based HR tech startup, focused on technology recruitment. The company recently raised $1.5m in seed funding, based on more than 100% growth in both 2018 and 2019.
- Blockchain’s unique ability to reduce risk and replace the need for trust within cross-border trade is now widely accepted. Risk is a topic of much discussion in today's trading community.
- Follow dltledgers on LinkedIn