Should bankers fear losing their jobs to fintech?
Fintech continues to gain traction in the Asia Pacific (APAC) as more organizations are beginning to realize the potential technology brings to finance and banking, especially with ever-evolving customer preferences. There are over 6,000 fintech startups in Asia alone, and this number is set to continue growing.
In 2020, the fintech sector saw the highest amount of users in Asia, with over two billion people using digital payments.
So what’s happening to banking and finance jobs?
According to Statista Digital Market Outlook, the number of fintech users in Asia is expected to increase to over three billion by 2025.
India and China make about two-thirds of global users when it comes to mobile payments, while Southeast Asia (SEA) is quickly growing as fintech startups promise better digital payment services.
With the growing increase of digital and mobile payments, banks now realize their biggest competitors are fintech companies, including digital challenger banks (DCBs). And the only way they can deal with the competition is by embracing technology itself — failure to do so will only lead to them ceasing into irrelevance.
The rise of fintech startups in the region would see a demand for skilled tech talent for fintech jobs as well. Currently, Southeast Asia is facing a huge shortage of skilled tech workers as businesses look to embrace new technologies. As such, most companies are looking to outsource tech talent to help them in their adoption of technologies like fintech.
Will fintech make banking and finance jobs irrelevant?
Whilst banks and other industries adopt fintech, there is a concern that current employees in the banking and financial services industry (BFSI) may soon find their skills irrelevant or out of date. Fintech solutions can complete manual processes a lot faster and with more accuracy, making the need for human labor less important.
This is already happening in Southeast Asia (SEA) as some banks are shutting down physical branches around the region. As fintech offers the convenience of digitalized services, the need for physical bank branches is proving to become far less important to customers.
For example, HSBC closed most of its branches in Asia as it relooks its strategy with customers moving to digital channels. The bank said that 90% of all customer contact is now digitized over the phone or the internet with the pandemic also speeding up digital payments and reducing the usage of cash.
Fintech jobs on the rise
As banks close down physical branches, naturally, concerns about unemployment amongst banking professionals are rising. Accountants, finance managers, and bank tellers are some of the roles in the financial industry that are slowly being replaced by technology.
For example, fintech solutions have replaced most manual processes that were done by finance and accounting staff in the bank. Technologies like robotic process automation and the adoption of artificial intelligence-based solutions have also sped up most of the repetitive tasks in the industry.
According to Associate Professor Dr. Nor Shaipah Abdul Wahab, Acting Head for the School of Accounting & Finance at Taylor’s University, the introduction of tools like blockchain is set to elevate the accounting profession by being able to offer strong protection of the client’s information, which in turn makes fraud and the lack of trust a thing in a past.
Although technologies like this may still be new to some, it is crucial to note that accountants can greatly rely on blockchain to keep up with the demands of clients and offer a wider range of services.
“Everyone is moving forward, and the accounting sector has to be up-to-date as not only will these technologies improve efficiency, but also enable the processing of vast volumes of data. The future of the accounting sector will greatly be dependent on those who are technologically and financially savvy as they will be able to provide valuable insight and assist senior leaders in making informed decisions that are based on data, analysis, and insights across auditing, taxation, and other units parked under the accounting sector,” said Dr. Nor.
Adapting to disruption with upskilling essential for BFSI talents
Dr. Nor added that it is no longer an option, but a necessity for accountants of tomorrow to be impactful in their workplace. Future accounting graduates must be prepared to adapt to disruptive transformation in the sector as fintech will not go away.
“The accountant can no longer think that their role is limited to accounting ledgers or tedious tasks. Manual payments and invoices will be brought to pass as cloud-based accounting, blockchain, and accounting software solutions will be here to stay due to these being able to manage risks better and improve efficiency. It is safe to say that fintech will continue to impact the accountancy practice through the opportunity of better insights on forecasting and analysis from powerful tools and data access,” added Dr.Nor.
Tech companies are also understanding the concerns universities have, especially in meeting requirements for fintech jobs. To help produce graduates that can adapt to new technologies at work, larger tech companies like AWS, Microsoft, Google, and Dell are already working together with institutes of higher education to train more graduates. This includes providing adequate training and reskilling skills to not only students but graduates and the workforce at large.
There is no denying that some roles will be replaced by technology. But for now, employees need not fear being replaced, and find ways in which they can improve their repertoire of skills.
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