Posted by Robert Half on 18 May 2015
The banking industry in Asia continues to face several challenges, but there are a few drivers that will bolster Asian banks in the near future.
Competition in the Asian banking industry remains intense. Even with an already crowded market, the region continues to attract new entrants in retail and investment banking, credit unions, advisory firms, and insurance – all seeking a part in the rise of Asia.
Overcoming consumer skepticism in Asia
For global and local players, capturing and cultivating a significant share of the banking market in Asia will be challenging. While Asian banks will continue to earn remarkable revenue from large corporate clients, industry players may face more difficulty in dominating the retail banking industry due to the diverse range of customer types in Asia.
Moreover, the global economic crisis has eroded consumer trust in banking as a secure repository for personal savings. Increasingly, Asian retail customers are less willing to deposit money with financial institutions. This trend is especially noticeable in some Asian countries, like Japan.
Crossing industry hurdles
While the banking industry in Asia continues to be dominated by a select few, market entrants are likely to set their eyes on certain countries like China, South Korea and India.
However, entering these Asian markets will be demanding. Challenges include strict regulatory requirements, instability in some economies, the potential for fraud and corruption, and difficulties in building brand and distribution networks.
Coming to terms with changing trends
In keeping with global trends, the Asian banking industry continues to see constant change. The banking sector in this region is especially dynamic because of the constant stream of emerging players, new banking regulations, and the evolving trends in the investment banking industry.
Broader demographic shifts will also prove to be a powerful driver of change. Large-scale urbanisation, a burgeoning middle class, and the increasing proliferation of mobile technology will bring banking services to the fingertips of millions of Asians.
Asian banks are well positioned to tap on the opportunities that these changes present. They have the home-ground advantage and can build on their local knowledge, existing customer base, and brand awareness.
However, Asian players will face stiff competition for top talent from global banks seeking a share of the pie in the Asian banking industry.
People are at the core of Asian banking success
The Asian advantage lies in its people – and this continues to be one of the greatest resources of the Asian banking industry with the Robert Half 2016 Salary Guide outlining this fact from its recent survey with top finance decision makers in the region.
Singapore’s expansion in its role as a hub for global services will see an intensifying competition for quality financial services professionals. Banks seeking to generate higher revenues compete for experienced and qualified professionals in the private banking, corporate banking and asset management sectors.
Leaders in the financial services sector in Hong Kong are expecting to expand their team of financial services professionals. Competition for talent remains intense, with the greatest demand in the insurance, private equity and hedge fund sectors for accounting and regulatory reporting professionals.
Japan’s banking and financial sector is actively looking to recruit professionals that are multilingual with strong communication skills to lead their regional and international businesses.
Willingness to adapt is critical
Given the challenges in the region, players in the Asian banking industry should be ready to adapt by embracing new technologies, new market conditions, and even new team members with diverse skill sets.
Asian banks must continue to update their business models in adapting to new regulations and reforms, and employ innovative technologies to deliver maximum protection, value and satisfaction to their Asian customers.