A funding squeeze and uncertain growth prospects are making Singapore startups less than gung-ho about adding to the city’s 18,000-strong fintech workforce. However, it may not be a bad time to look for jobs in the Asian financial centre. Rivals like Hong Kong and Abu Dhabi are hungry for qualified professionals. And that’s making Singapore's immigration hurdles less onerous than before.
In a 2021 Accenture survey, nearly two out of three firms blamed their talent gap on not being able to get work permits for foreigners. Nowadays, only 37% cite difficulty in securing employment passes as a hiring challenge. For this dramatic change, the employers and employees should thank Hong Kong.
The Chinese special administrative region is intent on reversing its brain drain, initially caused by a crackdown against political dissent, and then, by its isolationist Covid-19 policies. But this year, Hong Kong is back in the game. A Top Talent Pass program, introduced in late 2022, is luring graduates of prestigious universities globally by offering a 24-month visa even if they don’t have job offers in hand. In the first nine months, the city gave out 100,000 work permits, nearly 2 1/2 times as many as it did last year.
Singapore can’t afford to slim down when Hong Kong is bulking up. The city-state’s annual fintech festival is taking place this week amid a drought in growth capital. Through the first three quarters, the sector has witnessed only US$1 billion ($1.35 billion) in deal volumes. This is a second year of decline — from US$5.5 billion in 2021 and US$2.6 billion in 2022. Last year’s crypto meltdown has killed the buzz around decentralized finance. At the same time, Hong Kong appears to have Beijing’s tacit approval to position itself as a retail hub for trading virtual assets.
Then there’s the immigration question. Starting with the 2011 general elections, Singaporean voters have sent a consistently strong message that they would like fewer foreigners in their midst. Strict controls on overseas-worker visas since then have affected all industries, including banking and fintech. While the local talent pool is limited in breadth and depth, hiring overseas remains a hot-button political issue.
With non-citizens accounting for almost 40% of the city’s 5.9 million population, an abrupt reversal in policy is not in the cards. Especially when Prime Minister Lee Hsien Loong has dropped hints that polls, due by November 2025, may be held as early as next year.
Instead, Singapore is filling the void left by the desertion of overseas workers during the pandemic. Between July 2019 and June 2021, foreign employment excluding domestic workers shrank by 194,000. In the 24 months through June 2023, it has grown by 260,000. That works out to an average annual increase of less than 17,000 over four years, a cautious pace of expansion.
It’s important to take in enough fresh blood to keep the ageing society at the forefront of innovation, especially when it comes to the city’s core competence in trade and finance. That means more software developers, sales and compliance specialists, artificial-intelligence engineers and product managers. Cryptocurrency ventures may no longer be as exciting as they were two years ago, but the island’s central bank remains very interested in tokenizing financial assets by partnering with the likes of JPMorgan Chase & Co., Citigroup Inc. and T Rowe Price Group Inc. Meanwhile, interest in artificial intelligence — the central theme for this year’s fintech festival — is boiling over.
And here, competition is not limited to Hong Kong, the traditional rival. Armed with its own open-access large language model, Abu Dhabi is making a serious pitch to woo AI talent. Which is why under a new points-based system for employment passes that came into effect from Sept. 1, applicants who possess skills in short supply, and firms that contribute to Singapore’s strategic economic priorities, will earn bonus points toward their total scores.
However, this may not be enough. It isn’t just other cities doing more to lure talent. Large technology companies and financial institutions may also be crowding out smaller ventures. Gartner Inc.’s June forecast is for an 8% increase in worldwide banking and investment services IT spending this year. “Candidates prefer to work for incumbents” was cited as a hiring challenge by 64% of the firms in the Accenture survey. Large multinationals “may offer better job stability, career progression opportunities, monetary and non-monetary rewards and market-aligned benefits,” the Singapore FinTech Association and Accenture noted in their joint report.
Despite their funding constraints, Singapore’s fintech startups still want to hire, though not as strongly as last year's 40% jump in headcount. While securing work permits won’t be a cakewalk, it won’t be the showstopper it was two years ago. The red carpet for talent put out by rival employment centres and large firms is making sure of that.