If you’re a 20-something planning a long-term career in the Asian finance sector, good luck to you. Over the next three to five years, a third of job functions in Singapore financial services will disappear or be radically changed by automation, according to an April report by the Institute of Banking and Finance and the Monetary Authority of Singapore. Meanwhile, trading and investment banking jobs continue to fall under the axe in Asia – Deutsche Bank and HSBC are among the latest firms to cut their front offices.
If you want to live a life (comparatively) free from layoffs, where should you work (presuming that you’re not a technologist)? New industry-wide data and earnings reports from major banks suggest you should consider a job in transaction banking, the bread-and-butter sector that encompasses both trade finance and cash management.
The first half of 2019 marked the third year of sequential growth in global transaction banking revenues, with a “strong performance” in both cash management and trade finance, despite macroeconomic headwinds, according to a new report from research firm Coalition. The Asian region outperformed the rest of the world in H1. While transaction banking revenues were flat year-on-year in EMEA and the Americas, they rose 8% to $4.2bn in Asia.
This was mainly driven by revenues in cash management, the function that includes services such as currency clearing, overdrafts and wire transfers. “Global net interest income continued to grow primarily driven by Asia, particularly in the Greater China and Southeast Asia regions,” says the Coalition report, referring to cash management.
If you want to work in Asian transaction banking, the top-three players regionally are Citi, HSBC and Standard Chartered, according to a separate survey from Coalition in April.
HSBC’s Global Banking and Markets (GBM) division is bearing the brunt of the firm’s 4,000 global job cuts, announced last month, but the redundancies are primarily targeting expensive investment bankers. The GBM unit also contains the more mundane (but far more stable) transaction banking functions. In global liquidity and cash management, for example, revenues were up 12% to $1,387m year-on-year in first half of 2019, primarily from the impact of higher interest rates, notably in Hong Kong, according to HSBC’s H1 financial results.
You can potentially escape Deutsche’s even more sweeping layoffs – it’s culling 18,000 staff globally – by working in transaction banking. Transaction banking is “at the core” of Deutsche’s new Corporate Bank division, the main hub for corporate and commercial clients, according to a July statement about its latest restructuring plans. Deutsche’s 2018 annual report also pointed out that transaction banking “acquired numerous major mandates” in Asia.
Meanwhile, if you want a stable job at Standard Chartered – an Asian-focused firm that is only just getting back on its feet following years of cost-cutting under CEO Bill Winters – look no further than transaction banking. Income in the function was up 6% year-on-year in the first half, according to its H1 earnings report. Within transaction banking, you’ll want to focus on the dominant cash management product, which enjoyed a “strong performance” in the year to end-June.
Job losses are rare in Asian transaction banking, unless for individual underperformance, according to two recruiters we spoke with in Singapore. But hiring isn’t booming – you may be able to keep your job in your current bank, but rival firms won’t necessarily pay top dollar to poach you. “Banks in Asia are trying to work their transaction banking staff smarter, rather than being in a hurry to add headcount,” says Pan Zaixian, a partner at recruiters Pan & Co in Singapore.
Image credit: Orbon Alija, Getty
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