February 17, 2006

In Singapore, Finance Jobs Beckon Engineers

By Rajat Bhattacharya

SINGAPORE (Reuters) - On a recent Saturday afternoon, scores of young Singapore engineering graduates braved a torrential tropical downpour to attend a talk by a university professor making a pitch for a career switch into finance.

The don, promoting a graduate program that teaches "rocket science" to solve complex financial problems, assured the students that they were in the right place.

Singapore's government, he said, is set to announce measures to help make the city-state a center for the research and design of financial risk management products in Asia.

This could mean jobs at banks, insurance houses, hedge funds, mutual funds, wealth management boutiques, accounting firms and corporations for people with mathematical fire-power -- such as engineers, he said.

It could also lift the spirits of an engineering community that has seen industrial and manufacturing jobs leave Singapore to less-expensive destinations such as China, other Southeast Asian countries and India.

"Singapore is very well placed to become the risk management capital of Asia," Ng Kah Hwa, the professor promoting the program told Reuters in an interview.

"We have certain competitive advantage. We are a major foreign exchange center in Asia; Singapore is English-speaking; and we have the infrastructure for an international financial center already in place," said Ng, director of the Center for Financial Engineering at the National University of Singapore.

Other Asian cities lack such infrastructure. Tokyo is Asia's biggest financial center but analysts say it is hamstrung by high costs and a shortage of English-speaking finance professionals.

Hong Kong does not have a large foreign exchange market because the Hong Kong dollar is pegged to the U.S. dollar.


These are still early days in Singapore, but following a pattern seen on Wall Street in the 1990s, financial institutions here are increasingly turning to mathematicians, physicists and engineers to run critical financial functions.

In the 1990s, when Ng worked in a Singapore bank, academics in the sector were rare.

"Things have changed. Now the banks have a lot more PhDs. I get a lot of requests from headhunters and banks looking for quantitative analysts."

The new recruits -- once trained in the application of mathematics and computer science in finance -- would help identify and control credit, investment and foreign exchange risks, program computers to trade stocks, bonds and currencies and design exotic financial products such as derivatives.

Wong Choon Yuan, a former chemical engineer who switched from a career in oil trading into financial risk management at a European bank, says the biggest jobs demand in the financial sector is for risk managers and quantitative specialists, known as quants.

U.S. and European banks are recruiting more here and outsourcing risk management work, including to Ng's center


"They can hire two quants here at the price of one in London or New York," Wong, one of the first graduates of Ng's program.

Barclays Capital, Credit Suisse, Deutsche Bank and other global banks set up back-office risk management hubs in Singapore in recent years to monitor their regional and global operations.

As many as 300 risk management and related jobs will now be created each year in Singapore compared with just a handful of positions a couple of years ago, said Terry Lee, executive director of ACI Singapore, an association of finance professionals.


Asian banks woke up to the need for risk managers in the aftermath of the 1997/98 financial crisis. Demand grew after the U.S. Sarbanes-Oxley Act in 2002 tightened corporate disclosure standards.

Analysts say the next trigger will come from Basel II banking norms for quantifying and allocating capital for various levels of operational, credit and market risks from 2007.

Singapore is well equipped to meet the increasing demand thanks to its developed educational infrastructure. The city's National University of Singapore and Nanyang Technological University rank among the world's top 50 universities.

At the Nanyang Technological University, officials from Singapore's fund management industry are seeking to tap its talent, which includes an increasing number of students from China and India.

"There are very few risk managers in Singapore," Jeanne Chow, associate director of Singapore's fund management industry body, tells a hall full of engineering and business school students.

"Policy makers are only now looking to beef it up. The aim is to make us the next Dublin and Luxembourg," she says, referring to the back-office financial capitals of Europe.