Less than five years ago, Taiwan was facing a litany of problems – slow growth, an ageing population and stagnant wages.
Today, its economic story is vastly different thanks to its exemplary response to the Covid-19 pandemic. Among other things, it implemented quarantines, conducted contact tracing, and made face masks widely available early on. As such, it has reported one of the world’s lowest rates of infections and fatalities. Consequently, it’s recovering more swiftly than many other countries.
The Economist notes that Taiwan is one of the world’s fastest-growing economies today. With a GDP growth rate of about 2 per cent in 2020, Taiwan’s Directorate-General of Budget, Accounting and Statistics expects the economy to grow 3.83 percent in 2021. Considering that fewer than a dozen countries expect to grow at all right now, these are impressive numbers.
Border controls were recently tightened in response to its first case of the British variant of Covid-19, but for now, experts agree that Taiwan is seeing a rebound thanks to a robust recovery in domestic consumption.
However, it is certainly not entirely immune to the ripple effects of the coronavirus pandemic on the global economy.
Executive Senior Consultant at PeopleSearch Taipei, Sherman Chiou who specialises in executive search and recruitment for the Insurance, Banking and FinTech sectors explains how human capital and career strategies need to be recalibrated in light of recent developments.
The global coronavirus pandemic has given rise to several challenges including lending and exchange rate risks, as well as the influx of hot money. However, the government is mitigating such risks by taking measures to prevent improper trading or speculation that could affect the overall economy and the development of the financial industry.
It has been several years since Taiwan began the process of relaxing financial and technological regulations in order to support industry growth.
In 2014, Taiwan’s Financial Supervisory Commission (FSC) started encouraging the growth of FinTech through its Digital Financial Environment 3.0 project. Banks, securities and insurance companies are now allowed to provide low-risk electronic services online. People can now apply for credit cards, credit loans, open securities investment accounts, buy insurance, etc. In 2015, the FSC established a FinTech Office to plan and promote development in this sector. It has released several policy proposals which provide guidelines on how the industry can grow without disrupting the financial system or damaging consumer interests.
Over the years, some experts have said the efforts don’t go far enough. For example, while a regulatory sandbox allowing start-ups to test innovative financial products or services was initiated, a lack of tax incentives and other substantial perks from the government dampened participation. Major banks were also relatively cautious about launching new FinTech-powered financial products.
However, at the 2019 FinTech Taipei Conference and Trade Show, President Tsai Ying-Wen announced her goal to transform Taiwan into Asia’s centre for enterprise capital management and high-end asset management.
Taiwan’s well-established information technology infrastructure, sound financial system, strong commitment to innovation development, and solid cyber security systems are key factors in supporting this growth.
Against the present backdrop of relative economic stability, lifestyle changes as a result of Covid-19 have indisputably accelerated the transformation of the industry. Both FinTech and InsurTech are flourishing as many local financial holdings are establishing financial technology centres.
Several categories of financial technology professionals are currently in great demand in Taiwan:
- Software Developers and Engineers to propel innovation, develop and manage new FinTech software.
- Big Data Analysts to research consumer behaviour and provide business insights that can be used to develop new products and services. These insights are also integral in shaping effective sales and marketing strategies.
- Digital Transformation and Innovation experts to spearhead and implement transformation initiatives. Many insurance companies are implementing systems transformation and internal process optimisation initiatives. They also want to build a corporate culture steeped in innovation. Therefore, personnel who can formulate and execute such initiatives are crucial. Project Managers, Innovation Coaches and Culture Change Experts are among them.
THE FINANCIAL ECOSYSTEM
For Taiwan, the long-term goal is to establish an integrated financial ecosystem. This would comprise business models that combine Blockchain, Cyber Security, Cloud Computing and Storage, Artificial Intelligence, Robotic Process Automation, Data Analytics, etc. to enable e-payments, e-commerce, medical and health services, and digital wealth management.
Project personnel who are comfortable working in such an environment are also urgently needed in the FinTech industry to ensure seamless planning, coordination and implementation.
INSURANCE: DEALING WITH TRANSFORMATION IN UNCHARTERED TERRITORY
In addition to dealing with rapid digital transformation, those in the Insurance industry have to prepare for the adoption of International Financial Reporting Standards 17 (IFRS 17), a universal set of principles for the recognition, measurement, presentation and disclosure of insurance contracts. Although Taiwan only expects to adopt IFRS 17 in 2026, preparations are already in full swing.
Efforts to comply globally call for substantial changes across many aspects of insurers’ businesses including actuarial and finance, product development and operations.
According to a report in the Taipei Times, Moody’s Investors Service said compliance with new accounting rules could affect equity and profit recognition patterns for insurance companies, but might not change their creditworthiness. Overall, Moody’s expects IFRS 17 to improve the visibility of earnings drivers and new business performance by product line. It encourages insurers to optimise their business mix, re-evaluate products and manage their back books.
Actuaries and financial accounting personnel play a very vital role in ensuring compliance and continued innovation and growth.
RECALIBRATE HUMAN CAPITAL STRATEGIES AND CAREER PLANS TO STAY AHEAD OF THE CURVE
The focus for firms in the FinTech and InsurTech sectors should be to attract candidates who have superior soft skills. Creativity, agility, leadership and problem-solving skills are especially vital. This is because the nature and speed of transformation in these sectors will require among other things, innovation in terms of coming up with new products and services, creative problem-solving abilities, effective leadership to manage diverse teams, and the ability to spearhead transformation while responding swiftly to change.
Employers should also be on the lookout for those who are able to learn new skills swiftly. While hard skills such as software development or digital marketing are certainly sought after, companies must remember that a candidate’s hard skills could very quickly become obsolete. However, a person who lacks the requisite hard skills, but possesses an enthusiasm for learning could be much more valuable.
Professionals who want to thrive in this industry need to constantly update their skills – hard and soft. Physical bank branches are gradually being reduced, so those who are used to working in a traditional financial services environment and refuse to keep up with industry developments risk being eliminated. Depending on which roles they’d like to build their expertise in, mid/senior-level executives must make a concerted effort to acquire knowledge of regulatory frameworks, sales channels, product development, etc. They also need to be able to anticipate innovation and growth trajectories in these sectors and develop their competencies accordingly.
For some time now, we have been advising executives in this arena and we have a considerable talent pool ready to take on the unique challenges and opportunities in these growing sectors. Companies need to be future-ready. While technology is important, it is merely an enabler. When it comes to ensuring that technology development and implementation make a positive impact on the bottom line, capable professionals are equally, if not more vital.
For bespoke human capital advice, get in touch with us.