Sri Lanka at bright spot in human capital development, says AIA Group Regional Chief

 From left: Deputy Chairman Ceylon Chamber of Commerce and MD/CEO National Development Bank Sri Lanka Rajendra Theagarajah, Regional CEO AIA Group Bill Lisle, Chairman/CEO Ustocktrade LLC Co-Founder, The Cainan Foundation, Founder, Millennium IT & E-Channeling Tony Weeresinghe, Development Welfare Labour Economist Dr. Ramani Gunatilaka, Global CEO Virtusa Polaris Keith Modder, Senior GM Head HRM Group ICICI Bank T. K. Sirang, Standard Chartered Bank Sri Lanka CEO Jim McCabe, Associate Director HR Esquel Group Timmy Yak Wan, CEO 99X Technology Ltd. and Chairman SLASSCOM Mano Sekaram and Centre Director, HSBC GSC Colombo & Head of Global Hub Operations Eduardo Mercadillo 

By Charumini de Silva

Sri Lanka is at a bright spot in human capital development, as the country is well positioned to translate the potential of its already strong primary school and education system to workforce, an expert opined. Speaking at Sri Lanka Human Capital Summit session on ‘Asia Regional Perspective Challenges and Opportunities for Human Capital in Financial Services’ AIA Group Regional Chief Executive Bill Lisle said Sri Lanka’s adaptable employee mindset is receptive to new technologies and global learning and added that greater opportunities exist to focus on increasing female employability. 

It was pointed out that public private collaborations were the best way for policy reforms. 

Lisle asserted the acquisition to Sri Lanka’s business was a clear indication that AIA is not only interested in the people or the booming economy, but the opportunities in the financial services which could be developed over the next 5 to 15 years.

Emphasising that Asian life insurance market is at a point of inflection he said dramatic growth in life sales typically occurs as annual GDP per capita approaches $ 10,000. Thus he stated that it was critical for Sri Lanka to focus on developing human capital to cater to that potential customer base within the next 20 years. 

Outlining the background about the AIA group he said the company is in a very advantageous and a privileged position driving social and economic development across Asia Pacific since 1919.

AIA is currently the second largest life insurer in the world and the largest independent publicly listed Pan-Asian life insurance group. At present the firm has 45 million customers with a market capitalisation of $ 80 billion. “We are only focusing on Asia and we do not have any plans to go elsewhere,” he added. 

Intrinsic to the continued growth and development of emerging markets, the firm has $ 118 billion of Asian assets, while assuring the customers to the tune of $ 1 trillion. Although it sounds a lot, when one looks at the protection gap in Asia it is around $ 51 billion. Hence he said there is still a huge opportunity which needs to be harnessed. 

“To us Asia is the powerhouse driving that global economy and human capital is a deciding factor in this engine,” he stressed. 

Sharing insights on challenges faced and opportunities that may be found in the next 5 to 10 years he said it is important to look at the key fundamental drivers of growth and see how firms could harness that opportunity with human capital to have continuous growth in the financial services sector while also looking at disrupters. In addition the industry needs to look at collaboration, which for the financial services sector has never been very easy as firms compete fiercely. It was pointed out that firms should look at collaborations and support each other rather than poaching talent. Furthermore understanding and engaging the customer differently was noted important as well. 

Large population growth, rapid urbanisation, rising income and wealth, low social welfare and low private cover were listed as long term structural growth drivers in Asia.

“We have 4.1 billion people in the region by 2020, an increase of 700 million people since 2000. Around 1.7 billion urban dwellers is a huge opportunity, but challenges around developing human capital,” he stressed. 

Although there is a challenge across general insurance with low insurance rate trying to drive on sustainability, it would continue to put pressure across most financial services where margin is compressed. However, in the meantime there is a huge opportunity as well.

As Asia is projected to be the largest affluent market in the world by 2020 banks in the region can seek potential in other growth segments. Considering the global population 55% is still unbanked in Asia pacific while 31% of them reside in South Asia. Hence he pointed out there is a huge opportunity for financial services especially in catering to the small and medium market. 

“Sri Lanka also has a great opportunity in the SME market as it is expanding at a rapid pace, a growth untapped which will draw significant interest,” he added.

Looking at the drivers of growth such as protection gap, savings opportunity, retirement plans, unbaked population and large SME market it is important for the financial sector to focus on how they could attract the right people to support that growth for the future. He cited availability of key skills, shift in consumer spending and behaviour as well as speed of technological change as top insurance CEO concerns at present.

“Training needs to start now, it will get more expensive in the future,” he said adding that although the primary education is done well, graduates still need to be retrained in skills, data analytics before they are put into work places. 

Demographic shift, rising people costs, education skill mismatch, existing skill shortages and union harmonisation were some critical HR challenges that need to be addressed in the coming years.

Although technology transformation has added value to the industry, it has is also been challenging, therefore it is critical to balance investments in technology and people.

Noting that the growth of Fintech is to spur almost two million banking job cuts he said it was a key negative impact for the financial industry. Banks should focus on three areas such as where technology could perform automotive roles, where it could augment individuals and the need for new roles and skills.

“Automation will be attractive to reduce cost, increase productivity and be leaner to face new competitions, but it cannot fill skills on flexibility, judgement, analysis, common sense and advanced client thinking,” he pointed out.

Stating that millennials are a force to be reckoned with Lisle noted by 2025 the global workforce would comprise 72% millennials and banking or insurance is not within the top 10 employers of global millennials.

“Quite frankly millennials are not going to adapt to the baby boomers, we need to adapt to the millennials. We need to understand how to harness that potential because their values and focus are very different from what we have been used to. I think it would be one of the keys to success in the human capital road map over the next 5 to 15 years,” he added.

Furthermore, millennials bring high expectations, they think different, they want to work for a company that is social conscious, they want to be engaged, empowered, understand and add value to the organisation that they are working for. He pointed out lack of leadership as a key challenge they face across Asia. “At AIA under our mobility program we to move some of our senior managers across 18 different markets and give them that experience and leadership. For me, it is not only managing human capital, but it is also developing top quality leaders for the financial industry for the future. It is significant.”

 Pix by Lasantha Kumara