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Asset Servicing
The Asset Servicing Awards 2020: South Asia providers battle rising costs, competition
Rising demand for tech solutions in market largely driven by manual processes
The Asset 25 Jun 2020

For asset service providers, South Asia is a region that requires a deep understanding of the local securities markets, strong relationships with regulators, the ability to keep track of frequent changes in local rules, and a willingness to share best practices and provide thought leadership.

Although it was already a very competitive market before the outbreak of the Covid-19 pandemic, South Asia promises to become even more so as asset managers and institutional investors seek to reduce costs and enhance efficiencies by becoming technology-enabled in the near to medium term. This was already evident during the awards period.

Reflecting this trend, there was an unusual switching of service providers as mandates came up for grabs. In India, the region’s most important country in terms of size and complexity, one of the biggest mandates – US$18 billion in total assets under management – in the custody and fund administration space moved away from a long-established service provider to a competitor. (The mandate awards will be announced separately.)

The reason cited for the switch is that the incoming service provider had a stronger technological capability when compared to the outgoing one. This also hints at the rising demand for more technology-driven solutions in a market still largely driven by manual processes.

Indian service providers have to invest substantially in their technology offerings if they want to defend market share and stay ahead of the competition.

And while demand for manual servicing solutions still exist – as evidenced by the fact that it is still possible to win mandates that aren’t technology-focused – such mandates are expected to be gradually phased out by rising costs and a focus on efficiency that is pushing clients to adopt more technology-based solutions.

In addition, the impact of the pandemic is expected to bring about new requirements that can only be serviced efficiently by technology-based solutions.

It is in this context that winners of The Asset Triple A Asset Servicing Awards 2020 for South Asia are announced.

With consolidation among domestic fund managers underway, few are able to meet the complexity of local regulatory requirements. Deutsche Bank is one of a small number able to do so, and it retains the crown as  Best Domestic Custodian for India.

Citi wins The Asset Award for Best Subcustodian, India, while arch rival HSBC was recognized as highly commended.

In other markets, a strong technological capability also gives asset service providers a greater competitive advantage. In Sri Lanka, the much-awaited launch of delivery-versus-payment (DVP) settlement systems was set to be the area in which asset service providers were expected to do battle.

And while pandemic-related lockdowns have delayed the DVP launch indefinitely, asset managers and institutional investors are likely to continue preparing themselves for its eventual launch. This means a busy time for asset service providers as they seek to provide suitable solutions for their clients.

In the Bangladeshi market, recent developments have included settlements through a central counterparty, trading of government treasury bonds at stock exchanges, and a platform at the stock exchange for small-cap companies.

Standard Chartered wins The Asset Award for Best Subcustodian for Sri Lanka, Bangladesh, and Pakistan, as well as, Best Domestic Custodian for Bangladesh and Sri Lanka.

Deutsche Bank wins the Best Fund Administrator – Retail Funds for Sri Lanka.

To view the winners of The Asset Servicing Awards 2020, please click here.

For more details about The Asset Awards, please click here.

For more information about receiving the awards, please contact [email protected]

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