Asia Pacific (APAC) investment providers feel relatively unprepared when setting up systems to identify important emerging technologies such as blockchain and artificial intelligence, with only 9% in the region (12% in Australia and Japan respectively, 2% in China/Hong Kong) claiming to be at an advanced stage of preparation.
According to a global survey of 2,000 investors and 500 investment providers sponsored by State Street, about 87% recognize that digital transformation is important for the future of their organizations. The survey participants included 150 from APAC including universal banks, mutual funds, alternative investment firms and fintech startups.
The survey entitled “Finance Reimagined: Finding Long Term Value in a Digital Age” conducted a rigorous research program from March to July 2016.
About 86% of China/Hong Kong respondents (vs. 72% in Australia and 56% in Japan) are not currently in an advanced stage of building an integrated, omni-channel approach to digital transformation, according to the findings of the survey.
Overall, Japan-based investment providers are ahead of their peers in APAC on the path to digital transformation. Australia-based providers come second and are followed by China and Hong Kong
Among all aspects of digital transformation, APAC investments providers are the most advanced in terms of developing an innovative culture, although only 40% of Australian respondents claim to have achieved this.
About 56% of respondents in Australia, 58% in Japan and 14% in China/Hong Kong are at an advanced stage of applying robust cyber security measures that ensure data integrity.
Only 30% in Australia and 22% in China/Hong Kong are fully harnessing data and analytics to improve decision making. Japan is much higher at 54%.
About 72% in Australia aren’t currently in an advanced stage of building an integrated, omni-channel approach to digital transformation.
“The region has some unique challenges, in terms of localized investor needs and a complex regulatory environment. The winners will be able to navigate these challenges while forging enterprise-wide digital transformation and a culture of sustained innovation in their organizations," says Antoine Shagoury, executive vice president and global chief information officer (CIO) of State Street. "Investment providers can remain competitive in this fast-changing landscape by considering “forces of disruption” such as technology, changing investor behavior (i.e. investors are less loyal), and regulations."
Shagoury also cited the “three I’s” of data, namely: data “integration” which involves combining raw, unstructured data from multiple trusted sources; data “intelligence” which involves extracting new “smart” insights from data in real time; and data “integrity” which involves guaranteeing the integrity and security of data.
“To succeed in digitization, firms must excel across the “three I’s” of data and set a clear customer strategy. By increasing the ability of institutions to understand and act on their investors’ needs, the three I’s enable investment firms to create transparent, flexible services that increase trust and confidence in the sector, redefining stewardship for the digital era,” says Shagoury.
There are currently five top emerging technologies for investment providers, namely:
• Blockchain which could transform the trade lifecycle and drive transparency, traceability and trust;
• Predictive analytics spots trends in customer needs and drives future decision-making;
• Artificial intelligence of which nearly half of investment firms globally expect to use within five years;
• Real-time tracking systems which help asset managers respond to shifting market conditions at speed; and
• Identification (ID) software based on biometrics which can make customer verification more secure.
The State Street report also identifies how investment firms can recognize and act on opportunities to digitize aspects of their organizations including:
• Adequately investing in new technologies like cloud and artificial intelligence;
• Prioritizing cybersecurity which is the foundation for building solid client relationships based on trust and transparency;
• Having the right talent and a strong customer-centric focus which will accelerate an organization’s journey to a digital future.
“We’re focused on how deep-rooted digital innovation can generate new value for our clients by developing highly personalized, data-driven products that appeal to a broader range of investors,” says Shagoury.
