Insights
The race for SWIFT alternatives
The recent cutoff of sanctioned Russian banks from SWIFT has sparked a race for alternative cross-border payment channels.
New Zealand punches above its weight
New Zealand’s asset management industry has been punching above its weight in collaboration with the government despite its remote geographical location and its small population of just over five million. One of its firms recently became the first to be approved to distribute funds across borders under the Asia Region Funds Passport scheme.
The changing face of Chinese investors
Chinese mutual fund investors are increasingly displaying stronger confidence and maturity in investing. Female participation has increased, incomes are higher, and investors are more educated, savvier at online and digital communication, and allocating more income into investment.
Competition in China’s custody market stiffens
China’s custodian banks have been on a roll over the past two decades. But now their margins are being squeezed and new challengers are appearing on multiple fronts. Apart from competition from within, custodian banks are also seeing their market share being eroded by securities companies in the mutual fund and private fund sectors. Foreign banks are also entering the scene.
Evolution of the securities services industry
The custodian industry is highly concentrated today, with 60% of the assets held by the top five custodians, the result of several decades of growth and consolidation. M&A activities have played a major role in shaping the industry’s landscape today; a new wave of M&A activities will be triggered as the industry goes into the digital age.
China’s rising quants
China’s onshore quant funds have topped 1 trillion RMB (US$130 billion) in total assets under management since June this year. But what’s even more striking is that these funds have increased their total assets by nearly ten-fold over the past four years. They came under the spotlight recently when a top regulator called attention to the potential risks.
China’s bank wealth management business comes out of the shadows
China’s 25.8 trillion RMB wealth management market—now larger than its mutual fund industry—is entering a new era post-regulatory overhaul. With a new licensing regime, foreign competition, and the launch of Wealth Management Connect in the Greater Bay Area, innovation and transparency are reshaping bank-offered products.
Central bank digital currencies
CBDCs are actively researched on by 56 central banks representing 90% of the global economy. Apart from China which is progressing with its e-CNY project at high speed, 14 other countries are in the pilot stage of their CBDCs and preparing a possible full launch. The BIS anticipates that one-fifth of the world’s population may be using CBDCs in three years.
ESG funds ready for take off in China
China has seen a significant uptake of ESG funds over the past two years even though it is a late starter to the game. Its blueprint for national development is pushing ESG into the mainstream for both institutional and retail investors. However, the country’s ESG journey will be on its own terms, based on its own needs and characteristics.
The rise of digital investors
A generation of tech savvy digital investors is on rapid rise with the democratisation of investing. Many asset classes are now available for small amounts of investment. The digitalisation of financial services allows investors to access global capital markets around the clock.
Digital platforms transform China’s fund distribution landscape
Digital wealth platforms powered by big data analytics and artificial intelligence are rocking China’s fund distribution and wealth management market. They have rapidly developed into fund-selling powerhouses. Together with the push for investment advisory services, they have transformed China’s fund distribution landscape by bringing some much-needed diversification and discipline to the industry.
Tokyo’s bid to become a global financial centre
Japan has implemented a package of incentives to lure foreign fund houses to move to Tokyo, taking a big step forward on its plan to replace Hong Kong as Asia’s premier international financial centre. Despite these initiatives and Japan’s overall economic and other strengths, there are some intrinsic shortcomings that work against its plan.
Asia Region Funds Passport: a long way to go
More than a decade on, the opportunities behind the Asia Region Funds Passport remain an aspiration.
Front-to-back outsourcing: the third wave
Front-to-back outsourcing has become a new battleground for securities services providers in addressing the evolving needs of asset managers. Demand for fast and accurate data is driving outsourcing of front-to-back office operations.
Digital assets custody: too big to ignore
The explosive growth of the crypto market underscores how cryptocurrencies have come a long way from the days where many considered them a scam. Securities services providers are feeling their way into the world of digital assets.
Hong Kong Mandatory Pension Fund: survival of the fittest
The MPF in Hong Kong celebrated its 20th anniversary in December 2020. The system's total assets have hit the HK$1 trillion (US$129 billion) mark and rank among the 30 largest public pension systems in the world. A major digital revamp to the platform will be launched in 2022. Price wars and industry consolidation are likely.
Unlocking China’s domestic wealth
China’s asset management industry has developed the depth and breadth that goes far beyond mutual funds over the past two decades. Foreign fund managers now have a number of routes to tap the vast China market.
A golden opportunity for foreign custodians in China
Most foreign players’ ability to unlock China's domestic wealth has been unimpressive over the past 20 years. Citigroup made headlines in September with the announcement that its China unit has been awarded a local fund custody license. How would it be different this time?
Thoughts on Leadership
Like many other skills for life, we would never learn enough about leadership.
Are you ready for your staff to work from home?
Working from home is becoming a new norm as well as a necessity with the COVID-19 pandemic. This has posed a big challenge to both companies and the individuals. I would suggest six pointers for consideration in implementing work-from-home programs.