Singapore’s Merlion Park near the city’s Central Business District.S V Krishnamachari
Singapore is in for tough times ahead, with the country’s financial services sector expected to be hit by layoffs by banks due to disruptive technologies and a weakening global economy.
The country has seen its GDP growth declining steadily over the past three quarters, with the estimate for the third quarter (July-September) at 1.4%. The economy had grown at 2% in the second quarter and 2.6% in the first.
The Singapore government’s third-quarter labour market report released this month says though total employment grew by 12,600 in the third quarter compared to 9,700 in the second, it was far below the 33,400 in the third quarter of 2014.
The financial and insurance services added 2,600 jobs during the third quarter this year, with the sector now employing 2 lakh people.
But things could change in the country, a key financial centre in Asia, due to banking majors such as Standard Chartered, Barclays and Deutsche Bank cutting jobs due to a global slowdown. Singapore won’t be insulated from the depressing development, say analysts.
The worldwide cut in banking-sector jobs is a staggering 1 lakh, according to an estimate by the Financial Times, says Channel News Asia.
“We have seen a lot of offshoring happening, not just this year, but in 2014 as well,” CNA quoted Toby Fowlston, managing director, Robert Walters Southeast Asia, as saying. “We’ve seen areas like product control downsize in a number of banking businesses, and also some of the back-office functions as well, where we’ve seen that shipped to cheaper cost locations.”
Disruptive technologies in the banking sector that the country has to contend with, going forward, could worsen the situation.
“I think with digitisation, online banking, there’s even greater reason for banks to actually cut headcount. So I would say that in the next one or two years, we will see a lot of this happening,” says Ho Kok Yong, Financial Services Industry leader at Deloitte Singapore.
The financial sector contributes to more than 12% of Singapore’s GDP, said the CNA report.