Buy-side firms face an increasingly complex world, but there are plenty of bright spots to be found in Asia. As technology continues to transform the investment business globally, players that embrace digitization to mobilize data in the new era will find themselves a step ahead. Industry leaders shared views on the future of the financial ecosystem at BNY Mellon’s Asia Pacific Asset Servicing Client Leadership Summit in Singapore.
Keynote: The Future of Asia in the New World Order - Challenges and Opportunities, Professor Danny Quah, Dean and Li Ka Shing Professor in Economics, Lee Kuan Yew School of Public Policy, National University of Singapore
For decades, our economic life has been constructed around the fundamental values of western-style democracy, free-market capitalism and globalization. The conventional story is that this order is under threat because of the rise of Asian economies.
Delivering the keynote speech at this year’s BNY Mellon Asia Pacific Asset Servicing Client Leadership Summit in Singapore on March 12, Professor Danny Quah, Dean and Li Ka Shing Professor in Economics at the Lee Kuan Yew School of Public Policy, National University of Singapore, argued for a new narrative.
“There will be a new world order, and Asia will have a place in it,” he said, but we have to rid ourselves of the outdated notion that ‘great-power competition is what determines the international community’ and that we need a single nation to lead – a single ‘hegemon of world order’.”
Prof. Quah’s new narrative is based on principles very familiar to the financial sector. Applying an economic approach to understand the world order, he suggested, “The world order – the way the international architecture is constructed and regulates how globalization and international finance operate – should be determined by demand and supply. We in the international financial community are on the demand side, where our need for international financial architecture remains as strong as ever.”
According to Prof. Quah, the financial sector needs to build an inclusive and transparent system that re-engages with the real side of the economy. As Asia’s voice gets ever louder and its economic footprint grows ever larger, this remains a story about the financial community.
Against the backdrop of the new economic order, one of the key ways in which buy-side firms worldwide are seeking to evolve is by mobilizing data. They need data with speed and granularity to permit analysis for insights that help them achieve their investment priorities in this new era.
Panel Discussion: Sleepless in Singapore - Issues Keeping C-Suites Awake at Night (From left to right) Rohan Singh, Head of Asset Servicing, Asia Pacific, BNY Mellon; Tamzin Jandrell, APAC Head of Data Services and Global Head of Reporting & Distribution Services, BlackRock; Alan Artyun, Head of Business Operations, Eastspring Investments; Hani Kablawi Chief, Executive Officer of Global Asset Servicing and Chairman of EMEA, BNY Mellon
Speaking at a panel discussion on industry issues facing C-Suites, Alan Artyun, Head of Business Operations at Eastspring Investments, drew a distinction between data consumed at the back-end of the business and data used by investment managers at the front-end. The former, reported to clients, has remained fairly static as portfolio structures and models have held steady. But this is not the case at the front-end.
“In terms of front-end quantitative strategies, data is very much an asset. [We] take data from the robust industrial engine that we run at the back and combine it with other indicative data to allow us to make more insightful investment decisions. You might have all the data in the world, but you need to turn it into information that is readily consumable by the person looking at it,” he said.
Hani Kablawi, Chief Executive Officer of Global Asset Servicing and Chairman of EMEA, BNY Mellon, agreed.
“As a data provider, our value used to be primarily to the chief operating officers, with dashboards that speak to the validity, accuracy and timeliness of the information we provide. Now, we are pushing to provide that data in real-time, so that it becomes much more valuable to the chief risk officers, the heads of distribution and potentially the portfolio managers.”
For BlackRock’s APAC Head of Data Services and Global Head of Reporting & Distribution Services, Tamzin Jandrell, this means embracing technologies such as Artificial Intelligence (AI) and automation that provide scale and stability and allow it to create useful and meaningful insights from unified data.
The firm is already exploring robotic process automation, natural language processing and augmented reality to enhance processes that currently create 150,000 investment reports a month and 5 million proprietary risk reports a day, for example.
We are on a journey with regards to data and these new technologies, and we need to constantly look for avenues to re-examine, redefine and re-engineer our processes,” she said.
Allowing institutions to deploy tools like AI and machine learning, the cloud is a game-changing technology. However, despite its potential, its uses remain relatively confined within the financial sector as of yet.
Behind the challenges of data analysis and distribution, enterprises in the financial sector have to answer a more fundamental question: can they trust the data they have?
“What I think we’ve all been struggling with as we enter this era of big data is how we manage such big data sets in terms of sourcing from multiple areas, multiple applications and multiple third-parties,” Ms. Jandrell said.
BlackRock’s approach is to strive for a single source of truth – finding abilities, processes and databases to house data at scale – and then developing robust ways to verify data and find exceptions within very big data sets.
Relating this search for a single source of truth to the industry as a whole, Mr. Artyun would “love to see some strides taken toward tokenization of assets and collective investments.”
He acknowledged that custodians, asset owners and investment managers all have different needs, but contended that the blockchain could be the leap forward that the industry needs.
A lot of data that has to be collected individually today – like data on securities, collective investment vehicles, and so on – could be reconciled within a blockchain model that tokenizes the assets to streamline the whole process of purchasing an asset.
BNY Mellon’s Mr. Kablawi agreed that the system needs an overhaul, but argued that there is a still long way to go for tokenization or other means of unifying data sources. Until then, the reality of a single version of the truth continues to reside in the service-level agreement between the service provider and the asset owner or investment manager.
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