Commentary

Whenever I read about the apparently imminent arrival of the cashless society, I smile quietly to myself, knowing that the global facts tell a completely different story, one which should see cash surviving beyond the 21st century. Take the latest press release from London-based Retail Banking Research, for example: “The total number of ATM cash withdrawals worldwide is expected to increase at an average of 8% per year between 2010 and 2016, compared to an average of 6% per year in the number of [ATM] installations.”[1]

While there is a sense of uncertainty for some banks, others have made no changes to their hiring plans and good talent remains in high demand. Christine Wright, Managing Director of Hays in Japan, discusses trends and current opportunities across Asia from the latest Hays Quarterly Report. Despite the global economic caution which has seen some banks, particularly European banks, introduce more stringent headcount approvals and recruit only for essential hires, other banks, often Australian and Asian banks, are still hiring in many areas and we expect this to be the pattern for the remainder of the year.

Comparing Hong Kong with Singapore: Which one is larger? Hard to tell

ATM cards, especially those using magnetic stripes, are increasingly being exposed to sophisticated fraud attempts during transactions. Fraudsters are getting more intelligent and creative in devising methods to obtain users’ Personal Identification Numbers (PIN) and data stored in the ATM cards’ magnetic stripe.

Only 17 percent of Asian consumers expressed confidence in financial providers in Q2 based on the Corporate Executive Board’s (CEB) quarterly poll of 5,000 consumers in six Asia-Pacific countries. With markets exhibiting roller coaster like volatility, it is no surprise tha wealth management firms across Asia Pacific see an opportunity to rebuild client trust by demonstrating the value of their advice. Indeed, wealth management firms know they will struggle to meet their aggressive revenue growth goals without client confidence in their advisory propositions.

Islamic Finance Industry: Alpha & Omega The enactment of the Islamic Banking Act in 1983 spawned a new paradigm of banking in Malaysia. The establishment of the first Islamic bank (namely Bank Islam Malaysia) in 1983 and subsequently Takaful Malaysia in 1984 provided an alternative means for Shariah compliant fund placements and management. Since its inception, the industry has gained staggering momentum and Malaysia is currently regarded as a leading contributor in the Islamic finance industry. This development has mainly been driven by the government’s efforts in promoting the industry and providing incentives to boost growth. The Islamic finance industry has various components but the most notable is Takaful, which makes Islamic finance unique. Currently there are 12 Takaful operators in Malaysia (with four new licenses issued since 2009) and 4 re-Takaful operators. Bank Negara Malaysia (BNM) indicates the Takaful industry has been growing rapidly, appealing to both Muslims and non-Muslims. The industry is expected to grow by 15-20 percent annually, with contributions expected to reach USD7.4 billion by 2015.1 Speaking in Kuala Lumpur in April 2011, the former deputy governor of BNM, the late Datuk Mohd Razif bin Abd Kadir, indicated the Takaful industry had a compound average growth rate of 27 percent in terms of net contributions between 2005–2010, with family Takaful driving growth at 28 percent for the same period and dominating more than 80 percent of the total Takaful market in 2010.2 Takaful & Re-Takaful: The Basis of Shariah Compliant Insurance The prevailing needs of the Muslim community looking for a Shariah compliant alternative to conventional insurance accelerated the development of the Takaful industry in Malaysia. This, in addition to the uprising of the Islamic banking sector, boosted the Takaful industry to its present more refined and matured form. In 1982, the Malaysian government set up a task force to study the feasibility of creating an Islamic insurance company. The move was triggered by the Malaysian National Fatwa Committee’s decree, which ruled the current form of life insurance a void contract due to the presence of the elements of Gharar (uncertainty), Riba’ (usury) and Maisir (gambling).3 This was further strengthened by the introduction of the Takaful Act enacted in 1984 and the incorporation of the first Takaful operator in Malaysia in November of the same year. Takaful is a form of Shariah compliant insurance. The word originates from Arabic and is defined as ‘joint guarantee’. A Takaful fund is a fund in which participants contribute a sum of money to be used to assist participants against a defined loss or damage. The operator entrusted to manage these funds on behalf of the participants usually earns a fee known as the agency or Wakalah fee. However, depending on the variations of the Takaful fund’s operations, some operators may also earn profit from the investment of its shareholders' funds, or receive a share of the investment profit or any surplus of the Takaful funds based on an agreed contract.3 In all instances, the operator is usually indemnified of any loses that the investment may incur. The Takaful industry is broadly divided into family Takaful business (Islamic "life" insurance) and general Takaful business (Islamic general insurance). In Malaysia, Takaful operators have flexibility in choosing either the Mudharabah (profit-sharing) or Wakalah (agency) operational models in compliance with Shariah principles and prudential requirements. The Mudharabah model, more commonly used in Malaysia and the Asia Pacific region, provides an incentive for the operator to perform careful underwriting, to manage claims judiciously and to limit selling expenses so as to increase its return on management/shareholder capital and efforts. The Wakalah model, used in the Middle East, is seen to be relatively more transparent since fees are clearly related to an operator’s operational costs.

You are probably exposed to it already even if you did not invest in it intentionally. From holding on to some Singaporean dollar for that weekend getaway to Malacca to owning the stock of a multinational corporation, it is nearly impossible not to be involved in some way in the US$4 trillion (S$4.85 trillion)-a-day global foreign exchange (forex) market.

In a rapidly evolving place like China, it is important that any investment strategy reflects the conditions on the ground; frequent visits to check on the progress being made on infrastructure and industrial development in various regions is a crucial component of Urdang’s approach to investing in global property securities.

How you perform in job interviews is arguably the most important factor in determining whether or not you secure the job you want. This is particularly true for junior banking professionals, whose limited job-specific experience can mean interview performance is the key differentiator between candidates competing for the same role. In our experience at Robert Walters, there are five key mistakes commonly made by junior banking professionals in job interviews that instantly disadvantage them. If you can avoid these mistakes, you’ll be well on your way to interview success. 1. Not adequately researching the organisation they are interviewing with While it seems like a basic step to undertake when looking for jobs, we still see a number of candidates who don’t properly do their due diligence on the company they’re applying to work for. It is vitally important for candidates to be able to talk confidently and intelligently about what their potential employer does. You should be able to recite specific facts about the organisation, including:

Asian-Pacific banks have made steady progress in closing the operational excellence (OpEx) gap and are determined to overtake their European rivals in the near future. Some industry commentators see this as natural side effect of the higher economic growth within the Asian region. We don’t believe that the region's growth is the only driver for OpEx improvements. We know that not all Asian banks are improving at the same rate; and that organisations that lack a structured improvement program as well as their senior management team's commitment to follow through will fall behind, quickly. Possibly more now than ever before, it's critical for leaders within the financial service industry to actively steer their organisations to master OpEx and emerge as “leaders’. Step change improvements are needed to offset increasing rivalry and the ever increasing regulatory burden. This inevitably mandates better process hygiene and efficacy to address the ever-present pressure to achieve acceptable margins whilst remaining compliant. The need to improve on operational excellence is indisputable. This year’s OpEx Survey recognises a number of key focus areas that can help determine the future success of financial service organisations in this region: · Strategy Alignment Innovation management, customer value management, and strategy implementation will be key factors to gain competitive advantage as bank customers become increasingly sophisticated. · Process, Organisation & IT Management Firms recognise the importance of building a broader BPM capability rather than focusing on point solutions in process improvement or throwing more money at technology. · Performance Management Measuring and reporting performance, and the ability to link it to an appropriate KPI system will be key to manage value drivers, which ties back into our first point on "Strategy Alignment". · Human Capital Management Leading employers will look to develop maturity in knowledge management and entrepreneurship, whilst also looking to reap the benefit of structural changes linked to outsourcing low end tasks. Defining and implementing an operational excellence roadmap might just be the key to stop the vicious cycle of constantly chasing one’s tail. 

Did you hear the one about the man who jumped from a burning oil rig? Come to think of it, you probably have. The story of the "burning platform" is well-worn in business circles thanks to what the hero is alleged to have said to rescuers after they plucked him from the frozen North Sea: "Better probable death than certain death". Presenters love the metaphor because it dramatically illustrates how, in business, standing still is often the riskiest option of all. That is a lesson that cannot be over-learned. However, most challenges we face in business -- even those with great destructive potential -- come in far less explosive forms. In fact, most companies are better equipped at managing a fast-moving crisis than they are at responding to the subtle shifts and undercurrents that pose the greater long-time threat. Risks emerge slowly, damage accrues over time, and certain death for most businesses comes after a thousand cuts. It may seem self-evident, but the first and most critical step if you find yourself on a burning platform is to acknowledge it is on fire. This is where a surprising number of companies fall down. And the dangers of missing the signs are real and manifold. An outdated, inefficient back office investment management system invariably leads to unpredictable and often steeply rising costs, while exposing the company to significant operational risk. Such systems also tend to inhibit growth because they lack scaleability and the ability to support evolving markets or accommodate unforeseen contingencies. Most investment managers I deal with tell me a version of the same story: they came to understand the dilapidated state of their IT infrastructure and processes only after it had reached a crisis point. Until then, they had made do -- showing McGyver-like ingenuity - with a combination of dated legacy software, customised spreadsheets and bespoke add-ons. This is a revealing insight because over-reliance on ad hoc solutions is itself a prime indicator that your technology platform has already caught fire. Here are six others: 1. Is your vendor's client base declining? 2. Is software maintenance and vendor support declining in quality and frequency? 3. Do you have slow time to market caused by the need to work around your software limitations and/or develop new spreadsheets? 4. Has your vendor shifted focus to different markets or products, or is there disruptive uncertainty around future ownership arrangements? 5. Did the vendor spend less than 15 percent of annual revenue on research and development? 6. Are you still running your core investment management software on a 32-bit platform rather than being 64-bit enabled? If you find yourself saying yes to these questions, chances are your platform is already sinking beneath your feet. And, since the process of modernisation -- from inception to completion -- is a 24-36 month journey for most businesses, this might be the moment to make the first step. Many in the retail banking sector have done the sums and concluded now is indeed the time. The case for modernisation was given fresh urgency after for example the DBS systems outage left customers frustrated and the banks themselves scrabbling to rectify the situation. It is therefore welcome news that five major banks in the Asia Pacific will increase their technology and systems investment by 49 percent over the next five year. They recognise – not a moment too soon -- that archaic legacy platforms are slowing them down and stifling growth. Investment managers can benefit from a similar self-assessment. Is our current system equipped to cope with future regulatory changes and market shifts? Or does it force us to make do with suboptimal, often manual, solutions? Is it geared to the future or stuck in the past? It's a tough call in the current climate to justify any kind of long-time investment of time and resources without the promise of quick revenue. In investment management, as elsewhere, growth is synonymous with survival. But if the 'burning platform' story taught us anything, it's that standing frozen in time is no way to grow – or survive. 

Numerous articles have explored the usage of social media and marketing in the financial industry. Although our feeling is that no institution has really perfected their social networking strategy, most would claim that their engagement brings them closer to their customer and enables them to offer the products and services that their customers are looking for.

Across Asia in recent years, consumer demand for credit cards, unsecured loans and mortgages has increased substantially. With positive demographic changes and favourable economic conditions, it is expected this growth will continue at pace.

While the Australasian banking and financial services job market has seen mixed levels of demand so far in 2011, as the year progresses we’re expecting to see continued demand in key areas and skills shortages to appear, putting pressure on employers to examine the way they recruit.

Global regulators have proposed new liquidity and capital rules, known as Basel III, with the goal of reducing the likelihood of another financial crisis. These regulations will affect European and North American banks far more than their Asian counterparts, for three main reasons.

Demand is rising for banking and finance professionals across most of Asia and here Emma Charnock, Regional Director of Hays, discusses trends and current opportunities across the region from the latest Hays Quarterly Report.