Mr John Orchard, CEO, Banking and Finance Group, Euromoney

Mr Clive Horwood, Editor, Euromoney

Mr Mu Naimi, Chief Operation Officer, China Construction Bank

Distinguished guests,

Ladies and gentlemen,

1 A very good morning. It gives me great pleasure to join you today at the second Euromoney Asia Private Banking Seminar and Debate.

2 The asset and wealth management industry in Singapore has seen healthy growth in the past few years.

3 MAS just released our annual Asset Management Survey Report for 2018. Assets under management (AUM) in Singapore rose 5.4% to stand at S$3.4 trillion, as of end-2018. It is slower than the growth in 2017, but nonetheless, a laudable performance in a year where global AUM declined. Over a 5-year period starting 2014, AUM grew by a compounded annual growth rate of 14%.

4 In particular, private wealth has been a strong driving force for asset management growth. Over the same 5-year period, private banking assets grew by a CAGR of 7.3%. We expect to continue seeing strong, positive growth for private wealth management in the region.

The Boston Consulting Group also estimates that wealth in Asia will grow by 9.4% per annum from 2018 to 2023 to hit USD 58.2 trillion [1] .

This means that the pie in Asia will only be growing bigger for asset and wealth managers.

5 As the sector grows, demands would evolve with the changing needs of the private wealth client. It is therefore useful that today's discussion focuses on the future of wealth management, with topics covering next-generation clients, the digitalisation of private banking and future growth markets.

6 To continue to be successful, a wealth management centre of the future would require professional talent who are equipped for the future. Having high quality talent has always been a key tenet of Singapore's success as an international wealth management hub.

7 Some amongst us would recall that in 2011, the Private Banking Advisory Group launched the Private Banking Code of Conduct (the PB Code), which was the result of an industry-led effort to provide assurance on the competency of private banking professionals and to foster high standards of market conduct.

Under the PB Code, private banking professionals were expected to pass a common competency assessment called the Client Advisor Competency Standards (CACS), before they could provide advice to clients.

To date, 8,500 professionals have undertaken the CACS. The CACS now forms part of the Institute of Banking and Finance's (IBF's) Level 1 Certification for Private Banking.

8 We have continued to refine this over time. Last year, we undertook a major review with IBF and revised our competency standards to equip private banking professionals with future-ready skills.

Since January this year, we have made the Level 1 Certification mandatory for relationship managers (RMs) with less than 3 years' working experience. This means that besides completing CACS, junior RMs would have to be able to demonstrate competency in client relationship management, investment advisory, wealth planning and digital skills.

While it is still early days, we have seen strong take-up by industry and about 80% of junior RMs have already acquired IBF's Level 1 certification.

9 We cannot afford to be complacent though. Client demands on our wealth management talent are getting more intense and complex. We will need to continually develop our competencies and keep in touch with the latest developments affecting the sector in order to maintain the high standards we have come to be known for.

10 I would therefore like to focus the bulk of my speech today, on MAS' plans for developing future-ready talent for Singapore's wealth management sector, and how we can work with you to make this happen. Specifically:

What new skills we would like to see our wealth management professionals acquire; and

How to help our professional talent acquire such new skills and more broadly, to map training pathways for some of the roles.

What New skills to meet new challenges

11 First, on what types of new skills to acquire.

We want our wealth management professionals to develop skills that would enhance their expertise in an age where the use of data analytics and automation is becoming more extensive.

Further, wealth management professionals should also be ready to serve emerging needs, and I will highlight later, in particular, the family office and their need for talent with broad-ranging skillsets.

Skills to leverage analytics and automation technologies

12 In April this year, Ernst and Young released a study [2] on the impact of data analytics and automation on jobs in the financial sector. The study, commissioned by MAS and the IBF, provided a detailed review of 121 different job roles in the sector, including roles in private banking.

The report concluded that over the next 3 to 5 years, data analytics and automation will augment one in two job roles, as individuals leverage these technologies to amplify their performance.

Another one third of job roles would be transformed, as technology substitutes a significant proportion of job tasks, and remaining tasks across synergistic job roles converge into new roles.

13 While data analytics and automation may have a more immediate impact on certain sectors such as consumer banking, the private banking sector is also not immune to such impact. The EY study examined a total of 12 job roles in private banking, of which four were assessed to be highly impacted that of a trader, trade processing officer post-trade specialist and trade support specialist. Even in private banking which is commonly perceived to rely significantly on individual relationships we see technology having a high impact on one in three job roles.

14 I therefore encourage every one of you, to study the report very closely, to assess where the skills gaps might be, for yourselves or your staff, and to undergo the relevant training to develop these new skills. Even where the impact is low to a particular job role, there is potential for job tasks to be better-performed through the help of technology.

Let me use the example of a private banker, whose main role is to manage client relationships, advanced digital tools would increasingly be introduced to enable more targeted product recommendations and investment advisory.

Private bankers who are more adept with digital skills such as those with advanced digital acumen and literacy would have an advantage over peers without these skills. This is critical especially as clients increasingly become more tech savvy.

Professional skill sets for servicing family offices

15 We also hope to build up a talent pool with the ability to serve emerging needs. In this regard, let me highlight the need to build unique skill sets to serve the needs of family offices.

16 The growth in our wealth management sector has been aided by the increase in number of family offices setting up in Singapore. Between 2016 to 2018, we have seen the number quadruple.

17 For Asian families, this is possibly driven by:

A mind-set shift from wealth creation to wealth preservation;

The wish to have greater autonomy in managing their own assets; and

Succession planning and wealth transfer becoming more important for them, as they prepare for inter-generational transfer.

18 Apart from Asian families, we are also seeing an increasing number of US and European family offices setting up satellite offices in Singapore, as Singapore offers investors with access to pan-Asian and global opportunities.

19 Notwithstanding the current strong growth, Singapore is still at a nascent stage as a hub for family offices compared to the US or Europe. One key area that requires further work, is the strengthening of the expertise and pipeline of family office professionals.

20 A successful family office professional often needs to possess strong technical skills in order to appreciate specialised topics such as trusts and tax planning as well as 'soft' skills in engaging the families such issues as succession planning and inter-generational transfers are highly intimate and private matters.

How Acquiring new skills and growing our own timber

21 I have shared about what new skills we want our wealth management professionals to develop. Now, let me move on to the how.

Upskilling and re-skilling in technology-impacted job roles

22 Firstly, there is a need to upskill workers across all job roles, to capture new opportunities as well as address challenges brought about by automation.

23 Following the release of the EY manpower study, IBF has expanded the IBF Standards to include all 42 future skills identified under the study. The future skills identified range from foundational skills such as empathy to data and digital skills.

24 This means that skills such as advanced digital acumen and literacy which I mentioned earlier, will come under the funding ambit of IBF-Standards Training Scheme (STS), and enjoy generous subsidies of up to 90% on the course fees [3] .

The accredited programmes are widely available at IBF's website [4] , and I encourage you to make full use of the scheme to upskill your staff.

Where in-house programmes provide coverage on the identified future skills, they could also be accredited under IBF-STS to enjoy the same subsidies.

25 Second, for selected job roles which are expected to be highly impacted, there is a need for more concerted efforts to re-skill and re-deploy affected workers in partnership with MAS, IBF and our tripartite partners. At the firm level, firms can implement redeployment Professional Conversion Programmes (PCPs) to pre-emptively re-skill staff whose roles are impacted by transformation, to take on new or enhanced roles. For instance, an operations specialist whose job is to ensure that new and existing accounts are in compliance with local regulations and organisational policies, can be re-skilled to become an Assistant Relationship Manager or Product/Investment Specialist.

Skills map for family office professionals

26 MAS is currently working with the IBF as well as industry to also develop a skills map detailing the skills that are expected of family office professionals.

27 The skills map will serve to:

Inform wealth management professionals on the skills required to serve the needs of families.

Provide a framework for financial institutions and training providers to design training curriculum relevant to family offices. The programme can be accredited by IBF and qualify for training subsidies as well.

Provide guidance to family principals on the skill sets to look out for when hiring for their family offices.

28 The skills map is expected to be ready by early 2020. We encourage all of you to take reference and match it against the needs of your organisations. As family offices will continue to require significant support from commercial institutions, the demand for skills to work with family offices would extend beyond family offices themselves, to banks, external asset managers as well as professional service providers.

Growing own timber

29 Banks should also look at how best to grow their own timber. With the continued growth opportunities and challenges posed by new entrants, industry competition for talent will only intensify.

30 MAS and IBF have been working hard on talent development across the financial industry, including with our private banks. Together, we have put in place a comprehensive suite of schemes covering talent development from junior associates all the way to senior management, providing opportunities to develop local expertise as well as rack up international experience [5] . This is a joint effort between the government and the industry. We can only be successful if the industry shares the same commitment by allocating time and resources necessary for the training of your employees.

31 While our existing efforts have focused largely on wealth management talent after they have joined the sector, there is more that can be done before they join the sector. Targeting training at young talent before they graduate will facilitate their transition into full time roles.

32 In this regard, we plan to introduce a larger component of practice-based learning to the training of wealth management professionals at the undergraduate level. MAS is working with industry partners to encourage greater participation in the Work-Study Degrees, otherwise known as WSDegs [6] , an umbrella programme championed by Ministry of Education and SkillsFuture Singapore:

These undergraduate degree programmes closely integrate classroom learning with structured on-the-job training to help students acquire deep, work-relevant skills to ensure that they are work-ready upon graduation.

The courses cover a wide range of disciplines, including high job-growth areas in the finance industry, like wealth management, data analytics and cybersecurity.

The programmes typically involve industry partners in (i) co-designing curriculum (ii) co-delivery of curriculum and (iii) co-assessment of trainees.

Under the WSDeg, DBS has partnered NTU to develop the Applied Wealth Management programme, which has seen some early positive signs. For instance, the inaugural batch of 33 students recently completed their first 10-week internship with DBS, and DBS has offered many of them full-time employment even before they start their second internship.

33 MAS is working with the Private Banking Industry Group, or PBIG, to further incorporate the WSDeg as an important part of the talent development programmes of PBIG member banks. But participation in the WSDeg need not be limited to the PBIG banks. All private banks are strongly encouraged to participate, and through the WSDeg, develop a new generation of job-ready young professionals equipped with skills for the future. We also hope that through the strong relationship established with the banks in their formative, undergraduate years, WSDeg graduates would go on to become important and entrenched pillars of growth within the banks.

Conclusion

34 In conclusion, while the industry has done well so far, our environment is constantly evolving. Investing in our talent is the best bet for keeping up with the competition and rising above it.

35 Here is a call to action, for all of us to:

One, up-skill and re-skill our wealth management talent;

Two, focus on developing family office expertise; and

Three, grow your own timber.

36 I am sure there are other skills and emerging needs that I have not mentioned, but are equally deserving of attention, so please look within your firm to explore the talent needs, and act on them.

37 Let's work together, to build a competent, future-ready workforce, to ensure that Singapore remains a competitive wealth management hub for the future.

38 Thank you and I wish you fruitful discussions ahead.

1. [1] 2019 Boston Consulting Group Global Wealth Report

1. [2] The Impact of Wider Integration of Data Analytics and Automation on Manpower in the Singapore Financial Services Sector

1. [3] IBF-STS provides 70% funding for direct training costs subject to a cap of $7,000 per participant per programme. From 1 Jul 2016, Singapore Citizens aged 40 years old and above will be eligible for 90% co-funding of direct training cost.

1. [4] IBF website: www.ibf.org.sg

1. [5] Some of these programmes include: FAMS Finance Associate Management Scheme (targeting entry level talent): Supports employers who place Singaporeans on structured graduate development programmes. iPOST International Postings Programme (targeting entry and mid-level talent): Supports posting of high-potential Singaporeans on overseas postings to equip them for management roles in the future. FSP Finance Scholarship Programme (targeting mid-level talent): Supports development of Singaporeans by deepening their skills through post-graduate degree programmes in specialist areas where industry expertise is short in supply.

1. [6] There are currently 26 WSDegs on offer at our Autonomous Universities.

Source: Monetary Authority of Singapore