Market Outlook: Banking and Financial Industry in 2021

Banking and financial services sector expected to see a slow recovery in 2021. The global pandemic is causing widespread economic distress for businesses and consumers. While government relief measures have helped ease the financial strain of businesses, the banking industry in Hong Kong SAR is facing rising asset risks and deteriorating credit conditions.

As a regional financial services hub, the banking and financial services sector is expected to see a healthy, albeit slow recovery in 2021 as investments continue to flow between markets within the Asia Pacific region. Hiring in the front office will resume first, followed by middle and back office operations to support business demands and growth. However, the speed of recovery would still largely depend on how other countries manage their local COVID-19 situation and global access to a viable vaccine.

We expect to see rising hiring demand in wealth management (asset allocation) and corporate banking (debt restructuring). With companies from mainland China rolling out more aggressive expansion plans into Hong Kong SAR, we may see heightened demand for banking professionals to manage Chinese-related investments. The two key skills that most companies look for in candidates in 2021 are projection and forecast as well as debt restructuring.

Labour and Salary Trends in 2021 for Banking and Financial Services Professionals

Following a challenging year, banking candidates with highly sought-after skills and experience will still be able to negotiate for a higher salary when switching employers in 2021. However, the salary increment will not be as high as what the market saw between 2016 and 2019, when the economy was performing much better. Banking and financial services professionals looking to change employers in 2021 can expect a 10% to 15% increment in their salary.

In-demand Skills and Talent

We expect to see rising hiring demand in wealth management (asset allocation) and corporate banking (debt restructuring). With companies from mainland China rolling out more aggressive expansion plans into Hong Kong SAR, we may see heightened demand for banking professionals to manage Chinese-related investments. There are two key skills that most companies look for in candidates.

1. Projection and Forecast

The ill-impacts of COVID-19 have drastically shifted investment confidence around the world and banking customers naturally adopted a lower risk-taking appetite. Banks and financial institutions are looking to hire professionals in wealth management and corporate banking to conduct scenario mapping and develop action plans based on a variety of possible outcomes. The ability to put in place such robust plans can help organisations stay agile and responsive, as well as build business confidence to successfully navigate this new and volatile environment. Employers have relatively easy access to such talent in the current labour market. However, there are high expectations, with many organisations favouring candidates who have had prior experience working under immense pressure and who are well-informed and independent in their projection and forecasting abilities.

2. Debt Restructuring

Many corporate banking customers faced unprecedented financial challenges in 2020, such as unsustainable cash flows or complicated debts. There is a talent and skills shortage in this area as Relationship Managers were not required to have debt restructuring experience in a booming financial services market. Such skills are only required when the economy spirals into a recession, where many of the bank’s clients will choose to focus more on business continuity and sustainability in a bid to tide over the pandemic. Currently, the talent pool is limited to seasoned and experienced bankers who have dealt with similar business requests during the Global Financial Crisis and Asian Financial Crisis.

To successfully attract these talent, banks must be able to differentiate themselves from their competitors and offer attractive employment opportunities, such as portfolio expansion and career development within the organisation. Employers should also be transparent in sharing clear business plans, expectations and goals with the candidates during the job interview process. Having a more thorough interview will allow employers to identify highly-skilled candidates who can better integrate into the organisation’s culture and community.