With the arrival of the ASEAN (Association of Southeast Asian Nations) economic community (AEC), 2015 is shaping up to be a transformational year for South East Asia, particularly in the banking sector. Over time, the 10 diverse markets that make up the AEC will transform into one of the world’s most dynamic and integrated markets.
With a median age of 28 and a rising affluence that is increasingly concentrating itself in urban centers, the region is fast becoming the next frontier of growth for both regional and multinational financial services companies. Due to regulatory barriers and nationalistic inclinations that still exist throughout the region, it may take some time for that spirit of deep cross-market collaboration to take root. However, strong steps have already been taken with the signing of the ASEAN Banking Integration Framework, which allows for ASEAN-based banks to be classified as “local,” thus providing more operational flexibility.
Finding the talent to generate scale
Taking advantage of economic integration will require greater commercial and operational scale. The primary inhibitor in generating that scale is finding talent. While the relative size of the labor force is large (at 300 million, the AEC has the world’s third-largest), the consensus amongst business leaders we speak to is that the talent pool is inadequate to meet the qualifications and standards demanded by the financial services industry.
The response by leading firms to date has been to find, train, and transfer talent from their home markets, but this is, at best, a stop gap solution, as it has the deletrious effect of weakening the talent pool from the home market. Very few companies in ASEAN have the excess capacity to do this. Furthermore, this demand for talent is playing out at a time where competition for this limited supply is increasing dramatically.
Using your brand to win top talent
Your brand is undoubtedly a powerful weapon in the war for talent, and companies that are thinking about connectivity across the ASEAN community will have a natural advantage. In the past few years, CIMB Group, Malaysia’s second-largest financial services institution, has aggressively turned its banking business, which now covers five countries, into an ASEAN-centric bank. Its core brand platform, ASEAN for you, reflects its commercial strategy and has enabled the bank to reposition itself from a domestic champion to a leading regional player. This provides scale to the brand by allowing CIMB to offer a much wider platform for professional growth for both new and existing employees. In turn, this makes people feel like they’re part of something bigger and acts as a key differentiator in its recruitment and retention efforts.
Another opportunity in the war for talent, ironically, is to fully embrace the potential of remote banking. Strong regional players like Standard Chartered and DBS (Singapore) are examples of brands investing in their digital banking platforms to create better, more relevant customer experiences and to lessen the need for human capital (by pushing more customers to transact online). However, in this new context, it’s important to note that although the number of people-to-people interactions may be less, the reality is that these interactions are likely to be based on more complex needs. Additionally, in an age when every customer experience is subject to scrutiny, aligning employee behavior towards the brand’s promise becomes essential. The brand must act as a filter for employee actions and team initiatives. To do so requires close alignment and collaboration between brand, corporate communications, HR and operational teams.
Connect with Millennials through purpose
The final opportunity relates to the demographics of ASEAN. By 2025, an additional 65 million Millenials will enter the workforce. These are first-generation digital natives who are better educated, have different values, and demand more from the companies they work for. To appeal to this crowd, the core promise of the brand should be imbued with a larger sense of aspiration and purpose. It’s an effective tactic used by leading Thai companies like Siam Commercial Bank and Bank of Ayudhya, who have made social benefit a core part of who they are and what they stand for. As these banks have begun to expand into the adjacent markets of Cambodia, Laos, and Vietnam, having a purpose-driven proposition becomes a powerful recruitment and retention tool. One that not only differentiates the brand, but connects with younger demographics through its relevance and authenticity.
The key to capturing growth
To fully take advantage of the opportunities afforded by economic integration across Southeast Asia, financial services companies must rethink their traditional approaches to talent recruitment and management. By introducing a sense of scale to the brand, integrating purpose into its promise, and aligning behaviors to deliver that promise through collaborative internal efforts, financial services companies will be in a better position to capture growth in one of the world’s most dynamic markets.