Hong Kong’s US$700 billion private banking industry will face a shortage of quality middle and back office talent within the next five years, according to report produced by the Private Wealth Management Association (PWMA) and PwC, released yesterday.
The report claims that private banks in Hong Kong will place a greater emphasis on risk management and the provision of advice and planning as a service going forward, and that the industry will need to find talent to fill middle and back office roles to meet this shift.
The report was informed a survey completed by 35 of the association’s 46 members.
Amy Lo, PWMA’s chairman and the country head for UBS Hong Kong and chief executive, reiterated this point at a press briefing, stating that the industry has some way to go to meet its staffing targets.
“Today, there is a distinct scarcity of talent in the private banking industry – not just in the front office but throughout the bank, including the middle and back offices,” Lo told media.
“We should have 10,000 practitioners from front to back in Hong Kong, but estimates on the current number are far from that,” Lo said.
Presently, there are over 3,400 front office, 2,000 middle office and 2,200 back office practitioners.
According to the report, today’s frontline hires must excel in their ability to communicate, to respond to client needs and requests and to gain and retain clients. In five years time, however, relationship managers will also need to be competent in risk management.
A looming talent shortage has led PWMA to propose an apprenticeship programme run in conjunction with the Hong Kong government, in a bid to establish a talent pipeline.
If greenlighted, Hong Kong students will have the opportunity to partake in courses covering various front-to-back aspects of private banking. Students will ultimately take PWMA’s Certified Private Wealth Professional (CPWP) examination.
Beyond talent scarcity, 96% of respondents to the survey cited regulation as a key concern, with escalating compliance and operating costs eating into margins.
Technology and IT enhancements are also major challenges for the industry. One in four respondents said that digitally driven onboarding processes will add the most value to the client experience.