CFA Society Singapore
SINGAPORE (Feb 27): While 87% of investment providers in Asia Pacific agree that digital transformation is important for the future of their organisation, few of them are on track to become digital leaders in their fields, according to a recent report published by State Street Corporation.
State Street’s global study of 2,000 investors and 500 investment providers, entitled Finance Reimagined: Finding Long-Term Value in a Digital Age, combines its survey results with quantitative research with views from industry experts to explore how firms across the financial services industry are using digital technologies to enhance their business.
The 150 organisations surveyed in the APAC region include universal banks, mutual funds, alternative investment firms and financial technology (fintech) startups – the majority of which cited new technology as one of the main trends to redraw the marketplace within the next five years.
Despite what it observes as a “clear understanding of the importance of digitisation” among financial service providers in the region, State Street highlights that firms in China/Hong Kong are the least on-track to digital transformation in Asia Pacific.
On the other end of the spectrum is Japan, which comes in ahead of its peers in all categories of the survey.
Only 26% and 14% of respondents from China/Hong Kong claim to have achieved advancement in the respective terms of “developing an innovative culture” and “applying robust security measures that ensure data integrity.
This is a significantly lower proportion in comparison to respondents based in Japan (72% and 58%) and Australia (40% and 56%).
54% of Japan-based respondents say they are fully harnessing data and analytics to improve decision making, versus 30% in Australia and 22% in China/Hong Kong.
Across the APAC region, respondents feel relatively unprepared when it comes to setting up systems to identify important emerging technologies such as blockchain and artificial intelligence, with only an overall 9% (12% for both Australia and Japan, 2% in China/Hong Kong) claiming to be at an advanced stage.
86% of China/ Hong Kong respondents – versus 72% in Australia and 56% in Japan – claim they are presently not in an advanced stage of building an integrated, omni-channel approach to digital transformation.
Mark England, head of asset manager sector sales, Asia Pacific, believes the APAC region has some “unique challenges in terms of localised investor needs and a complex regulatory environment”, where winners will be able to navigate these challenges while “forging enterprise-wide digital transformation and a culture of sustained innovation in their organisations”.
“New digital technologies will enable firms to provide a more fluid, dynamic and interactive investment experience for clients. Moreover, they will help the industry to deliver the type of personalization investors are increasingly demanding, at scale,” adds Antoine Shagoury, chief information officer, State Street.
“Firms that neglect to understand and embrace emerging technologies from blockchain to artificial intelligence will also fail to remain competitive in this new era of finance, while those who live and breathe the digital revolution will be those who define the future of the sector.”