The future looks promising for asset servicing providers in Asia, as asset managers plan to launch more products and utilize a broader range of services in 2016 in order to benefit from the growing wealth in the region looking to be invested. Custodians also stand to benefit from the global interest in China, reflected in the increased participation in the Shanghai-Hong Kong Stock Connect.

 

The industry is not free of challenges, however. Asset managers participating in a survey by Asset Benchmark Research point to regulatory complexity in the region and high cost of services. The former needs to be addressed through greater cooperation among regulators, while the latter prompts a trend to bundle outsourced services with fewer providers.

 

The purpose of the online survey, conducted in March and April 2016, was to determine trends in the industry, managers’ practices and preferences regarding asset servicing, as well as the ways service providers can better address asset managers’ needs.

 

The survey gathered responses from 13 countries in the region concentrated on two regional financial centres, Hong Kong and Singapore. Forty-three percent of participants identified themselves as global asset managers – long only.  The rest were domestic asset managers – long only, alternative asset managers or other companies.

 

In the series of 25 questions, the survey participants were asked about their perception of the quality of services they are receiving from their custodians, about operational challenges, their considerations when choosing a service provider, their practices in lending securities or using cross-border schemes, and about their intentions in utilizing custody services in the coming year.

 

In most questions related to qualitative factors, the respondents were asked to rank their top three choices. For tabulation, the top selection was given the full score, the second – half and the third – a quarter score.

 

To access survey findings, please click here.