The struggle is real.
2020 is not how anyone could have forecasted it to be. As the world grasps for answers in this extremely difficult time, communities and business across the world are struggling to keep afloat, as the pandemic continues to take its toll. While healthcare and frontline medical workers work hard to fight this pandemic, it comes as no surprise to anyone that the economic sector is badly hit during this difficult time, and this virus is significantly impacting businesses and the economy, and the banking sector is no different. Chetan Mahendra, Head of Corporate Treasury at Citi Singapore and an SMU alumnus, shared the journey thus far, during the recent SMU Accounting Masters Alumni Talk Series webinar.
A Global Problem
Singapore had just come out of an 8-week Circuit Breaker, a lockdown measure making it compulsory for residents to stay home except to buy essentials. During this time, all businesses have to adapt as retail stores shuttered their gates and the banks were not spared.
Chetan, an SMU Master of Professional Accounting alumnus shared that from the financial sector point of view, Singapore has indeed come a long way, but while the sector has made significant progress during this period, but there is still some way to go. He shared that the problems Singapore banks are facing are not unique only to our country. In fact, the challenges of so many employees working at home, risk of losing jobs, government support are seen across all around the world.
With this crisis, there are views that banks would then move into a mode of risk mitigation. However, Chetan shared, “In this crisis, banks are increasingly a part of the solution rather than part of the problem. While many may think that the banks’ strategy should remain conservative in their risk appetite, it is equally important that banks do not be completely risk-averse. Many banks have been stepping up to help clients by renegotiating payment schedules, extending more loans to SMEs, etc.”
What Lies Ahead
As unforeseeable as this pandemic came to hit us in the face, the future is also uncertain. While it is forecasted that the global economy is projected to contract sharply by -3 percent, Chetan cautioned that at this moment, the recovery process is likely to be uneven. The fact is that at this moment, the narrative is slowly shifting from crisis and lockdown to reopening and recovery. Banking may seem like just one sector of the many, but the truth is, all business issues are essentially banking issues. “It could be a U-shaped recovery, a W-shaped recovery – it’s anybody’s guess, and we have to wait and watch”, Chetan shared.
It is certainly not all doom and gloom for us though. The fact is that many sectors have taken on the crisis in their stride. E-commerce businesses are born out of necessity, and suddenly online shopping has become the new normal. Many businesses who were hit hard by this crisis due to supply chain issues are now shifting their focuses. This crisis has been an extremely powerful catalyst for change in both digitisation and workforce changes as the globe is met with this unprecedented crisis.
The Future of Work
The Monetary Authority of Singapore has also been trying to shift focuses on important skills necessary in the financial sector even before the Covid-19 crisis. It is important that technology is used to substitute a significant proportion of job tasks, to improve efficiency. But that is not to say that robots will take over the jobs of many. In fact, Chetan quipped that what is now important, would be able to augment these machine-based tools to look beyond the data and make sense of the underlying stories, and a strong understanding of finance and accounting fundamentals will remain a prerequisite. “More importantly, as technology and automation continue to take on the more repetitive processes, increased emphasis will now be placed on qualities such as curiosity, creativity and empathy”, he highlighted.
In terms of jobs in the banking sector, this forced work from home may have convinced some folks in higher management that certain jobs can be done at home in not requiring a physical office visit. But Chetan begged to differ slightly, while the remote office setup works well, there also come a social aspect which is necessary for an industry that holds the emphasis on your network. “Sometimes, it is who you meet over coffee conversations or a post-work drink. Exciting innovation can happen through such engagements!”
As for Chetan, his job remains largely unchanged though there is a heightened focus on liquidity during these uncertain times. At Citi's corporate treasury department, they are responsible for making sure the bank has sufficient liquidity, that is cash or liquid assets so that in terms of crisis, bank can honour its commitments like people being able to withdraw cash. He shared that in his view the Singapore banking and finance sector hasn’t seen that much job loss during this time. However, he stressed the need for professionals to look at where the industry is heading towards. “The thing is that there are a lot of people with expertise in individual core areas such as accounting, finance and tech. What the sector needs now are people at the nexus of these areas - who have an understanding of fundamentals of finance, coupled with good data analytics skillsets, equipped with basic programming to translate their ideas into reality.”
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