Risk may be fairly established in Asia’s more sophisticated financial centres but it’s still fairly uncharted territory in countries like Indonesia and Vietnam.
Keen on jumping on board the emerging markets bandwagon? Peter Chong, managing consultant, risk, MRIC, speaks with eFinancialCareers about the rapidly growing appetite for risk jobs in these countries.
Why so sought after?
There’s a need for experienced people in all areas of risk, including market risk, credit risk, and operational risk in Indonesia and Vietnam. This is mainly due to the lack of experienced local skills, particularly in analytics, IT, architecture and back-office support.
Generally, both markets prefer to hire locally, but senior risk professionals are scarce. There are job seekers with one to four years’ risk experience in line with the growth of the sector, but there’s a scarcity of good local talent with 10 plus years’ experience. In line with this, salary increments for veteran risk people can be about 30 per cent.
In Indonesia, the market is more advanced than Vietnam. It’s also a bigger market and the economy is strong. The banking sector has already undergone a consolidation about seven years ago and they’ve tightened the visa requirements for foreigners.
If it’s a C-level or director position, it’s relatively easy to get the approval for a work visa, but if it’s a slightly more junior role, approval times can take up to a year. The country’s regulator expects positions to be localised, however, the economy has expanded so quickly that there’s still a shortage of experienced talent.
This has resulted in banks going after the same small group of local candidates and every time they switch firms there’s a huge increase, causing salaries to go up. There are instances where it’s actually cheaper to employ a foreigner than a local person (given similar levels of experience), but it’s generally harder for organisations to get the approval to recruit a foreigner. The shortage of risk professionals means that some positions can be left vacant for many months.
The Vietnam story
In Vietnam, several big banks have entered the market via strategic investments. There are a number of reasons for this: there’s a huge demographic, a large under-banked population, which is quite young, and the country is geographically well placed – being part of the Golden Triangle.
The risk framework is very different here, so if these candidates have only worked in Hong Kong and Singapore their whole lives, they may not be able to survive because they’ve never experienced being in a start-up risk operation where data and existing structure/process is lacking.
While expats going into Indonesia have to be very senior, it’s different in Vietnam. Most foreigners come in on a three-year visa. I think regulators understand that there’s a huge vacuum of talent so hiring isn’t as restrictive. However, that’s not to say it is easy, the work visa application process can be exhausting.
The talent challenge
There are expat risk professionals who want to move to these countries, but it’s not always easy because some, even if they have been based in Asia, aren’t experienced in working in a developing country.
There are also candidates from Singapore, Hong Kong and more developed markets who get hired in Vietnam and Indonesia, but they generally need to have some sort of previous experience in emerging markets.
Candidates from India are often looked at for risk roles in Asia’s developing countries for a number of reasons. The Indian market has developed more quickly and in a similar fashion to some of these economies; and they have already been through the cycles of NPL, regulatory tightening, and overall banking fluctuations that both Indonesia and Vietnam will still undergo.
In addition, many global banks and consultancies have utilised India as a back-office analytical centre supporting businesses in Europe, Asia, and North America. So the talent pool there is now quite deep and from a package perspective, usually cheaper than people from Hong Kong, Singapore and Australia.