“I think job seekers in Asia should join 2nd-tier banks and earn less money”

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I think job seekers in Asia should join 2nd-tier firms and earn less money

There's no doubt about it, it's a pretty bad time to be facing a redundancy in Singapore. The unemployment rate for the second quarter of 2017 was 3.1% and the government warned in May that we should expect the rate to rise further.

This may not be high by world standards, but it’s still a level not seen since the financial crisis days of 2008/2009.

The labour market is even worse for investment banking support professionals (as I know from recruiting in this area for a US bank in Singapore). With yet more offshoring on the cards for a lot of the foreign banks due to cost-saving targets, it's hard to feel safe in your job right now.

However, there are opportunities in the back-office...if you know where to look. Private banking is the darling of the finance sector in Singapore. And the good news is that a great deal of the operations functions that exist (or used to exist) in investment banking now exist in private banking.

Over the last 12 to 24 months jobs such as KYC, client on-boarding and client due diligence have exploded in popularity in the private banking sector – as have middle-office roles like operational risk, business risk and control management. Some of these jobs are suitable for experienced investment banking back-office professionals.

Of course the one thing you won’t possess if you have an IB background is private banking domain experience – and that’s why you should be flexible when it comes to salary, the grade of the role, or even the kind of bank you work for.

If you’re a director of client onboarding at an investment bank, for example, and you're concerned about job stability, you should absolutely think about taking a VP-level role within a private bank. Over time your market value will increase significantly if you make this move, and more to the point, you will avoid being laid off in one of the toughest banking markets that Asia has seen for some time.

In order to make yourself more attractive to a private bank, it's best to curtail your expectations when it comes to just about anything: take a pay cut, take a demotion, work for a firm you consider second or third tier. For example, leaving a tier-one foreign investment bank to join the private banking unit of a Singaporean firm is actually a very good idea – these divisions are among the least likely to offshore their back-office roles.

Alternatively, if your own bank has a private banking wing, I would start to network with people who work there and to liaise with your internal recruitment team. Even if your job isn’t immediately at risk, the long-term growth prospects for ops people in private banking are way better than in investment banking. Making the move now will enable you to sleep much better at night.

Unfortunately, this kind of advice isn’t popular. Most back-office professionals I have offered it to are deluded – they prefer to take their chances and try to move for the same money and title (and in some cases they try to negotiate even more).

I hear “I can't justify taking a step back at this point in my career” quite a lot. Try to remember, though, that even hedge fund managers normally take huge pay cuts for the first few years when they set up on their own or join a small firm. They justify this knowing that the long-term payoff is well worth it.

The author has been recruiting for the banking industry in Asia – in both agencies and in-house – for more than 10 years.

Image credit: Anton Grachev, Getty

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