Hong Kong banks are expected to face a talent gap in AI, green finance, and expertise tied to the Middle East and Southeast Asia markets over the next five years, according to a study led by the Hong Kong Monetary Authority (HKMA).

The survey, conducted with the Hong Kong Association of Banks and the Hong Kong Institute of Bankers, covered 147 banks in Q1 2025.

Arthur Yuen, HKMA deputy chief executive, urged banks to focus on training staff rather than competing for talent through higher salaries.

The study found that 57% of banks are positive about prospects for 2026 to 2030, citing increased business opportunities and technological advances.

Meanwhile, 11% expect challenges due to geopolitical risks.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ Hong Kong’s talent shortage reflects broader regional banking challenges

The HKMA’s push for training over poaching reflects a systemic talent crisis across Asia’s banking sector that extends far beyond Hong Kong’s borders.

In private banking alone, Asia has approximately 7 million millionaires requiring around 200,000 private bankers, but only about 10,000 qualified professionals are currently available1. This supply-demand imbalance has driven salary increases of 30% or more for job switchers in Hong Kong and Singapore1.

The digital skills gap compounds this challenge, with 62% of banking leaders acknowledging a widening digital talent gap2. This shortage becomes more acute when considering that 35-40% of consumers are open to switching to digital-only banking services2, creating urgent demand for professionals who understand both traditional banking and emerging technologies.

The specific skills mentioned by HKMA—AI, green finance, and Middle East/ASEAN expertise—represent areas where traditional banking knowledge intersects with specialized technical or regional knowledge, making qualified candidates particularly scarce.

2️⃣ Training investments may offer more sustainable talent solutions than salary wars

The economics of talent poaching have become increasingly unsustainable, making internal development programs more attractive for banks seeking long-term stability.

The “crazy” competition described by Bank of Singapore executives has led some banks to sell off their Asian operations rather than compete on compensation1. Meanwhile, banks that invested in training programs and partnerships with educational institutions have shown more sustainable growth patterns.

Hong Kong’s shift toward favoring Mandarin-speaking professionals and reduced willingness of local banks to hire laid-off foreign bankers3 suggests that cultural and linguistic skills—which are better developed through training than recruitment—are becoming increasingly valuable.