Singapore’s fintech startups are facing a funding squeeze and a talent gap, while cities like Hong Kong and Abu Dhabi are presenting attractive opportunities for qualified professionals. Singapore’s robust fintech workforce of 18,000 may not be eager to add to their numbers due to uncertain growth prospects and limited access to funding. However, the situation in Hong Kong and Abu Dhabi is different, prompting Singapore to reassess its immigration policies.
According to a 2021 Accenture survey, nearly two-thirds of companies cited the inability to secure work permits for foreigners as the main reason for their talent gap. However, Hong Kong’s recent introduction of the Top Talent Pass program is changing the game. This initiative grants a 24-month visa to graduates of prestigious universities without requiring a job offer. As a result, Hong Kong issued 100,000 work permits in the first nine months of the program, almost 2.5 times more than the previous year.
Singapore cannot afford to downsize its fintech workforce when Hong Kong is actively expanding. Singapore’s fintech sector has experienced a decline in deal volumes, with only $1 billion recorded in the first three quarters of the year, compared to $5.5 billion in 2021 and $2.6 billion in 2022. Furthermore, Hong Kong has gained Beijing’s support to position itself as a retail hub for trading virtual assets, further intensifying competition.
The immigration issue also plays a role in Singapore’s talent shortage. Strict controls on overseas-worker visas affect all industries, including banking and fintech. With almost 40 percent of Singapore’s 5.9 million population consisting of non-citizens, a sudden reversal in policy is unlikely. Instead, Singapore is focusing on filling the void left by departing overseas workers during the pandemic. This cautious expansion strategy aims to attract fresh talent and maintain Singapore’s innovation leadership, particularly in trade and finance.
To achieve this, Singapore needs professionals in various roles such as software developers, sales and compliance specialists, artificial intelligence engineers, and product managers. While the hype around cryptocurrency ventures has diminished, Singapore’s central bank remains interested in tokenizing financial assets in collaboration with major institutions like JPMorgan Chase & Co, Citigroup Inc, and T Rowe Price Group Inc. Similarly, the interest in artificial intelligence is growing, as evidenced by its central theme in this year’s fintech festival.
Singapore faces competition not only from Hong Kong but also from Abu Dhabi. Abu Dhabi’s efforts to attract AI talent are leading it to implement a points-based system for employment passes, which rewards applicants with skills in high demand and firms contributing to Singapore’s strategic economic priorities.
However, competition for talent is not only coming from other cities. Large technology companies and financial institutions also pose a challenge by potentially overshadowing smaller ventures. According to the Accenture survey, 64 percent of firms reported that candidates prefer working for incumbents due to factors such as job stability, career progression opportunities, and market-aligned benefits.
Despite funding constraints, Singapore’s fintech startups still aspire to hire, albeit at a less accelerated pace compared to previous years. While obtaining work permits remains challenging, it is less of a hurdle than before. The red carpet rolled out by competing employment centers and larger firms ensures this. Singapore must secure its position in the fintech industry by balancing the talent shortage, attracting skilled professionals, and providing the necessary resources to foster innovation.