zeti akhtar aziz : the changing face of talent speech by dr zeti akhtar aziz, governor of the central bank of malaysia, at the aif ( asian institute of finance ) international symposium 2013 “ changing face of talent ”, kuala lumpur, 28 august 2013. * * * it is with great pleasure that i welcome you to the aif international symposium on the changing face of talent. in preparing for the future, a future that is going to be fundamentally different from the current environment, talent development and its management will need to be accorded with an even greater priority than previously. this is on account of two significant shifts in the landscape that we are operating in that will fundamentally affect the human capital that we need. the first is the rapid and significant transformation of the economic, financial and business landscape which will continue to have far reaching changes on the talent requirements. the second is the changes in the character and nature of the talent that is now coming on stream. these emerging changes have warranted new approaches to human capital development and management. to not recognise these changes and their implications will not only affect business performance but also the overall economic progress of a country. my address this morning will briefly discuss the fundamental changes that are affecting the financial and economic landscape and its implications for talent requirements. my remarks will then proceed with some reflections on the changing nature and character of the talent that is coming on stream. i will then conclude with some thoughts on the implications these developments on talent development and management, in particular, for the financial sector. the challenge for recruiting and retaining the right talent has also become increasingly more acute, particularly for the financial sector. therein lies the urgency for the greater focus of attention on these issues and the need to accord greater priority for this important agenda. the transformation of the economic and financial landscape the economic, financial and business landscape is rapidly being transformed and is continuously evolving. globalisation and internationalisation, accelerated by liberalisation and the rapid advancement in technology are increasing connectivity between economies and between financial markets across borders. this is resulting in greater international economic and financial integration and interdependence. regional integration in asia has for example created immense opportunities for economies of scale while paving the way for new and larger markets. a significant global shift in this environment is also the growing importance of emerging economies. as a result, many of these economies are becoming huge consumer markets. in asia, this is resulting in greater regional trade and cross border investment activity. a further fundamental

financial sector, in terms of the ethical standards and values embraced and demonstrated by the workforce in the financial industry, and the strength and integrity of its leadership. the financial sector has historically been and remains highly productive in relative terms. in malaysia for example, the financial sector has had the highest total - factor productivity growth over the recent decade relative to other sectors of the economy. employment in the financial sector has also been growing annually with a large proportion of the growth being in the higher skilled segment. this accounts for the higher level of wages in the financial sector at about rm36, 000 annually, compared to the national average of rm21, 700 annually for the economy. financial services employees are also generally educated to a higher level, with more institutions requiring post - graduate or professional qualifications, in addition to the relevant work experience, for holding key and senior - level positions within the industry. in light of the more challenging environment going forward, generating the supply pipe line for talent and addressing the short supply of critical talent with new skills need to be given urgent priority. what are these skills? there has been considerable attention to the shortage of new and higher technical competencies – including in the area of risk assessment and management – required by financial institutions in the new operating environment. the growth in islamic finance has also added important new dimensions to the talent requirements. beyond these clear gaps however, the promotion of more sustainable business models in finance will require additional new skills which have not traditionally been areas of focus in financial institutions. this includes skills in change and crisis management, business recovery planning, the ability to develop and sustain long - term customer relationships, and skills to direct and manage operations in international and cross - cultural contexts. also particularly important will be the ability to build, motivate and lead strong teams under significantly more challenging conditions in which institutions may be more constrained by regulation in their ability to recruit and retain talent simply by paying more. perhaps more than in any other sector, the response to the challenges facing the financial industry in managing talent needs to be much broader, forward looking and more strategic given its central role within the economy. even in countries that are not contemplating new compensation regulations, financial institutions need to carefully consider the higher expectations of regulators for compensation and incentive systems to be more closely aligned with prudent risk - taking. talent strategies must reinforce a strong and enduring ethical foundation of the organization, while developing the individual and organisational agility to deal with external forces of change, including changes induced by economic and