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Asia in 2019: Reshaping financial services

Alfred Lee
Alfred Lee
Managing Director, Data & Analytics, Asia Pacific, LSEG

Asia played a leading role reshaping financial services in 2018, with Refinitiv at the heart of the action. How will technology disruption and the powerful combination of data and AI continue to ensure the region is center stage in 2019?

  1. Technology disruption was a dominant theme of 2018, with a powerful combination of data and AI creating new opportunities for traders and investors in Asia.
  2. Asia is home to more and more start-ups challenging the way business is done, with a number of major financial centers launching initiatives to attract innovative new firms.
  3. Refinitiv is driving important projects like Belt & Road Connect, making it possible for more businesses to be a part of the renewal of financial services in APAC.

In 2018, Asia played a leading role in world events, perhaps more than in any other year in recent memory. The ongoing ramifications of the U.S.-China trade war, the meeting between President Trump and Chairman Kim in Singapore, and the huge economic investments driven by China’s Belt and Road initiative have dominated discourse.

If anyone ever doubted it, events in Asia now have global impact. And just as in macroeconomics, over the course of 2018 Asia has played an increasingly leading role reshaping the global financial services industry.

Asia is home to more and more start-ups challenging the way business is done. Across the region, financial centers from Hong Kong to Singapore and Sydney to Seoul launched initiatives to attract innovative new firms and help them develop their ideas.

Donald Trump met Kim Jong Un in Singapore during 2018. Asia in 2019: Reshaping financial services
Donald Trump met Kim Jong Un in Singapore during 2018

Coupled with this, established firms from overseas are looking again to the region to expand and diversify their businesses. In particular, the relaxation of ownership rules in China and the continued maturing of markets across developing countries in South East Asia are attracting new investors and giving them new ideas.

Technology disruption in 2018

All this activity has been underpinned by developments in financial technology, to the extent that technology disruption was a dominant theme of 2018. No part of the financial industry has been left unaffected by this: the way that firms interact with their customers and the tools they have available to serve them have been transformed.

This is a trend that will continue well into 2019. One area of technology disruption in particular that will, I believe, grow in prominence next year is the powerful combination of data and AI in creating new opportunities for traders and investors.

For example, 2019 will see greater transparency and efficiency come into emerging markets in Asia driven by better data and analysis tools.

Already we’ve seen great progress in this area. Just recently, Refintiv enhanced the WM/Reuters Thai Baht Spot FX Benchmarks with data sourced from Matching, our anonymous central limit order book. This has allowed the Thai Baht benchmarks to become ‘trade’ currencies, opening them up to more investors as a result.

Better data is also helping financial professionals make more informed investment decisions. For example, Japan Post Bank is using news and social media sentiment indices to help manage information flows, drive actionable insights and provide sharper investment decisions for its customers.

Improving customer experience

In fact, the growing use of more sophisticated investment tools has been a trend we’ve seen right across Asia in 2018 as accelerating wealth creation creates new potential customers and increases competition.

Firms have already started to realize how technology can help them serve customers better and bring competitive advantage, but 2019 will see an even greater focus on improving the customer experience.

A good example of how firms in the region are using advanced digital technology to serve customers is Siam Commercial Bank. Siam Commercial Bank partnered with Refinitiv to support the continued enhancement of its digital strategy, offering its customers comprehensive market data and information. This combination of data and tools is helping Siam Commercial Bank, and other firms like it across the region, provide its customers with new experiences tailored to their specific requirements.

Siam Commercial Bank adopted a suite of wealth management tools and digital solutions from Refinitiv to power its business in Thailand. Asia in 2019: Reshaping financial services
Siam Commercial Bank adopted a suite of wealth management tools and digital solutions from Refinitiv to power its business in Thailand.

It’s also important to highlight the increasing importance and focus by firms on cloud. A 2018 Refinitiv survey revealed how firms globally are increasingly looking to consume their data in the cloud to innovate faster and increase their agility. In fact, the Asia findings found 86 percent of financial firms surveyed in Asia said they will use public cloud for the majority of their market data needs in less than four years, with many set to rapidly increase their investment in public cloud.

Trading and investment activities are increasingly moving online and via mobile. Here again, Asia is leading the way, especially with China and India home to the largest populations of internet users in the world. In India, for example, around 50 percent of retail trades on Refinitiv’s platform are today made via mobile apps.

Refinitiv supported this shift by launching Protrade, an app that allows trade execution on all Exchanges in India through the Omnesys platform. As of October 2018, the app had been rolled out with 35 brokers and been downloaded more than 250,000 times by end clients.

Crypto regulation

One area that was rarely out of the news in 2018 was the cryptocurrency industry, with a particular focus being how crypto firms might be regulated. This regulatory scrutiny will of course continue well into 2019 and, along with a greater focus from within the industry itself on transparency, will see these firms move further into the mainstream.

At Refinitiv, we’ve been at the heart of this movement towards institutionalizing the industry. Earlier in 2018 we launched a new cryptocurrency data feed providing reliable, real-time information from six currencies across major cryptocurrency trading exchanges.

This was designed to encourage efficiency and transparency within the global marketplace for investors, and is another example of how data is creating new value and opportunities for all financial industry participants.

We also launched a new crypto app in Eikon, built specifically for the Japanese market. The new app aggregates pricing and news from all Japanese crypto exchanges, providing much-needed transparency into the local crypto market for financial services professionals.

Asia in 2019: Reshaping financial services

The progress that we’ve seen over 2018 has been supported by partnerships between all sides of the financial industry. This trend has been particularly noticeable in Asia, and I believe will evolve in 2019 into bigger and more extensive relationships between established players, new entrants, and industry bodies.

This year we announced a tie-up between Refinitiv Labs, our innovation research centres, with the Singapore FinTech Association to pioneer advanced ways to combat financial crime. As the cost of financial crime soars – nearly half of large firms in Asia Pacific have fallen victim to financial crime according to a Refinitiv True Cost of Financial Crime report – fighting and preventing this issue will continue to be a major trend in 2019.

We also partnered with Japanese financial information firm, QUICK, to provide Eikon users with deep insight into Japanese markets. Over in Hong Kong, we worked with Seabury TFX to launch a new marketplace for trade finance in Asia. Built using App Studio in Eikon, our third-party development suite, the new service addresses the challenge associated with the liquidity of corporate receivables that many companies around the world face today.

And in India, we collaborated with financial and business platforms like Zerodha and Moneycontrol to provide our StockReports+ corporate analyses to Indian investors.

Partnerships like these both create entirely new services and bring detailed insight to a broader audience, helping ensure the future success and security of the entire financial system.

Belt & Road Connect

As global markets are shifting their attention to Asia, and local markets here evolve, at Refinitiv we’re renewing our focus on the region. In fact, in many ways the latest chapter in our company history reflects the reinvigoration of financial services across Asia.

Currently, around 20 percent of our business is in Asia, and over half our employees are based here. Three of our top five cities by revenue are in the region. But more important than this, we’re actively driving important projects like Belt & Road Connect, linking businesses in and out of the region and making it possible for everyone to be a part of the renewal of financial services in APAC.

2019 will undoubtedly see more of the global geopolitical and macroeconomic agenda set by Asia. For example, Japan will be host to the G20 for the first time ever in 2019, again putting our region in the spotlight.

This will continue to impact financial markets, bringing challenges as well as opportunities. Refinitiv is extremely well positioned to play a central role in helping our customers navigate whatever the new year brings, enabling our customers’ success in these exciting times.