IMF’s World Economic Outlook estimates the global economy, though shrunk by 3.75% during the second half of 2010, is on a recovering path. This recovery is spread unevenly with advanced economies registering a growth of about 3% while emerging ones witnessing 7% growth. Interestingly, Asian economies – whether advanced or emerging – are in the forefront of global economic recovery. Asia is back in the spotlight after nearly a decade and half since the onset of financial crisis in the region. Asia has always demonstrated its capacity to rebound fast after crises. This is presently seen in its stock prices and credits, which are seen reaching pre-crisis level.
In fact financial sector, in the present circumstances, is one of many indicators of economic growth as the sector collects and analyses information from firms and market. Various studies have been conducted that correlates the performance of financial services sector with that of economy. Financial services sector has the potential to foster growth by channeling resources from traditional sectors to growth-inducing sector thereby encouraging entrepreneurship and channeling risks.
Asia, currently, serves as a savings destination that provides western financial capitals with the resources to manage. Most of Asia, with its strong crisis rebound capacity, booming economies, and reforms oriented governments, has all the right ingredients for further development of its financial services sector. The growing number of global financial services institutions and their increasing workforce in the region are testimony of the evolving financial sector in the region.
In spite of these growing numbers in Asia, most high value added activities are performed in the western financial capitals and a few financial centers in Asia such as Hong Kong and Singapore since developed economies still form the biggest market for financial services while the captive centers in Asia serve as offshore locations. However, as the Asian economies evolve to become attractive markets for high-value added financial services, these captive centers would be seen performing similar tasks as their peers in the developed economies. Nonetheless, global banks in Asia are even now facing shortage of qualified employees in addition to high level of attrition, thanks to the growing economy in the region. Therefore there is a strong need to create a sustainable supply of highly-skilled finance professionals in Asia that are on par with global standards to feed growing appetite of Asian financial services sector. Introducing specialized finance education at university level (bachelors and masters) could be a long lasting solution to reduce gap between demand and supply, though not completely eliminate it.