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APAC financial institutions lack technological and operational capabilities to support business growth

Anuradha Shukla | June 30, 2017
As such, only 41 percent of them are confident about meeting their growth targets in the next 12 months, according to FIS' 'The Hunt for Growth Across Asia-Pacific' report.

tech capabilities

Less than half (41 percent) of financial institutions in the Asia Pacific (APAC) region are confident about hitting their growth targets for the next 12 months, according to FIS' 'The Hunt for Growth Across Asia-Pacific' report.

Sixty-three percent of the 1,042 executives polled said regulations will remain a significant hindrance, while 33 percent say that interest rates pose a threat to them.

Half of the respondents also claimed that their companies' current technological capabilities are not strong enough to fully support their growth plans, while 55 percent say the same about their operational capabilities.

The report revealed that so far, only 35 percent of buy-side firms in the region have reached near-full or full automation of trading. However, this figure is expected to rise to 62 percent in three to five years' time. In addition, Asia Pacific financial institutions plan to automate areas such as risk management (67 percent) and reconciliation (66 percent) by 2022.

APAC financial institutions need to also improve their big data capability. Less than 6 out of 10 respondents said they are effective at unifying data across their organisations (55 percent), and effective at using external, unstructured data to help drive decision making (54 percent). Only 57 percent of them are using predictive analytics tools too.

Besides that, financial institutions in APAC were found to be cautious when it comes to adopting artificial intelligence (AI) and blockchain solutions. Less than a third (30 percent) of the respondents are piloting AI for performance analytics (44 percent), market data management (40 percent) and risk management (37 percent). Meanwhile, only a quarter (25 percent) of the respondents are experimenting with blockchain for collateral management (45 percent) or clearing and settlement (36 percent).

In addition, 34 percent of the respondents believe that their companies are unable to deliver personalised services to clients, with 40 percent blaming it on outdated technology.

Commenting on the findings, Nasser Khodri, head of Asia Pacific at FIS, said:  "Our research has shown that firms that are closest to achieving operational excellence are growing more rapidly than their rivals. Asia Pacific financial firms that strengthen their capabilities in areas such as data management and emerging technologies will therefore be better placed to capture growth in a hyper-competitive environment."


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