SINGAPORE (Nikkei Markets) -- Singapore's financial technology firms are looking to hire more people even as the broader banking and insurance industry turns increasingly cautious due to a slowdown in regional economies.
A report by the Singapore FinTech Association and consultancy PwC earlier this week showed 94% of fintech companies are planning to expand their workforce over the next 12 months, with 28% expecting to double headcount in three years.
"Survey respondents were very optimistic about the outlook for the fintech industry in Singapore, with over 75% stating they believed industry growth would accelerate with more opportunities available," SFA and PwC said in a report based on inputs from 93 executives and professionals working in the industry.
The bullishness among fintech companies is in contrast with the sombre mood among banks and other financial firms, where strong demand for staff with digital or wealth management experience has been offset by a slowdown in activities such as investment banking.
"Hiring activity in banking remains conservative, with a majority of them being replacement roles," said Lim Chai Leng, director for banking and financial services at Randstad Singapore, an executive search and recruitment agency.
Singapore's economy grew just 0.1% on year in the second quarter, the slowest pace since the end of the global financial crisis in 2009, hurt by contractions in sectors such as manufacturing and wholesale and retail. The financial sector, however, bucked the trend with an on-year expansion of 5.2% during the three-month period.
The financial sector accounts for about 13% of the city-state's gross domestic product and employs close to 200,000 people, or 5.3% of the workforce. The local fintech sector, which straddles finance and infocomms, is much smaller with between 6,500 and 10,000 people on payrolls, according to SFA and PWC.
Still, the Singapore fintech sector, which comprises 600 to 900 companies, is larger than the one in rival Asian financial center Hong Kong, where the number stands at just over 550, according to investment agency InvestHK.
"Numerous initiatives taken to promote the development of fintech firms in the Lion City have led to a flourishing fintech scene with companies of all sizes, ranging from the quintessential start-up firm to large financial institutions, either identifying as fintech companies or increasing investments in this field," SFA and PwC said in their report.
They added that the Singapore fintech industry encompasses a diverse range of activities, with artificial intelligence and machine learning, savings and investment, and insurance technology being the areas with the largest number of participants.
Singapore fintech companies that have grown rapidly over the past two to three years include insurance company Singapore Life, remittance company InstaRem and peer-to-peer lending platform Validus. InstaRem and Validus are backed by Vertex Ventures, a venture capital firm owned by Singapore state investor Temasek Holdings.
Outside of fintech, demand for staff appears strongest in areas such as wealth management due to strong growth in the number of Asia's high-net-worth individuals. Citi Private Bank, for instance, told Nikkei Markets it has been making new hires and its headcount in Singapore grew 10% in 2018 from 2017.
"Within the front-office space, we expect to see a constant demand for wealth relationship managers and bancassurance managers," said Randstad's Lim.
Will Tan, managing director of Principle Partners, an executive search firm specialising in the financial industry, said Singapore has seen a large increase in the number of family offices, which are investment firms set up to manage the wealth of single or multiple rich families.
Banks and insurance companies are also aggressively hiring people with experience in digital technologies and creating whole new departments that did not exist a few years ago.
In contrast, investing banking activities have shrunk, with some banks shutting down their equity capital markets and commodities trading operations, he added.