The Future of Financial Markets in Asia Pacific – a paper from Kapronasia and Broadridge

Challenges for the financial industry are growing. Third party non-bank financials threaten the core businesses of traditional banks and institutions. Trade tensions are escalating between the US and China, and even the US and Canada, and threaten to take the global economy on a different path, which may ultimately have a dramatic effect on the business of banks. Further, as interest rates rise, the stark realities of a worsening economic environment may threaten existing loans and products. Finally, the biggest challenge for financial institutions over the next five years: regulations.

One might think that it is a difficult time to be in the markets.

Yet despite uncertainty, markets have done well. Global stock market capitalisation hit US$79 trillion in 2017, a nearly 25% increase from 2016’s US$65 trillion. Growth brought significant profits to the global investment banking industry, with the top-9 investment banks globally combining for US$78.4 billion in net income in 2017, finally above pre-global financial crisis levels. 

Along with the challenges are new opportunities. Potentially game-changing technologies like blockchain and artificial intelligence could change everything from settlements to the way that consumers interact with their bank. And entirely new business models, like initial coin offerings (ICOs) that raised more money in Q1-2018 than traditional venture capital funding, are redefining markets. Financial institutions are also becoming more sophisticated in their approach to the market through a better understanding of costs and which operations are core or not core to their business.

In this The Future of Financial Markets in Asia Pacific white paper from Kapronasia, in collaboration with Broadridge, we take a look at the key challenges, opportunities and potential for the future across Asia Pacific markets today, as well as some of the key financial centres across the region. We examine the potential impact of new technology, like blockchain and AI, on financial institutions addressing their legacy technology challenges. Finally, we look at some of the key opportunities across the region and approaches that organisations can use to deal with the constant change defining their future in this dynamic market.