The Rapid Adoption of Managed Services in Asia

Michelle Wong explains why managed services are proving to be so popular among Asian investment firms intent on improving their data management capabilities

Michelle Wong, Lead Manager, Client Service

Over the last 12 months, I have met with investors across Asia, including both asset managers and asset owners. One common thread spanning those conversations has been the automation of data management processes, but this focus on achieving greater efficiency is no different than any other region. The preferred path, however, is unique as many APAC firms have been keen to augment their operating model with managed services and less inclined to either build their own proprietary data management solution or utilise a third-party system to facilitate the move away from spreadsheets.

Until fairly recently, investment organisations in APAC have been able to meet their investment and operational data needs using Excel alone, relying on manual processes and adding headcount when necessary as the business grows. However, rising employment costs undermine the feasibility of that approach, particularly as the growing demand for data, within the organisation and externally, highlights the need for workflow automation.

At the same time, firms are increasingly focused on achieving greater scale. Larger firms are getting bigger and a key element of these strategies is the ability to achieve greater operational efficiency. Firms that have a solid data management platform are better positioned to achieve economies of scale and to do so more quickly. In APAC, we are seeing firms scale through rapid asset growth and the extension of investment strategies. As a result, there is a greater need to adopt the same tools and solutions as their counterparts in Europe and North America.

However, instead of looking to buy a solution—as many EMEA firms did when they moved off spreadsheets—asset managers and institutions in Asia are turning directly to managed services.

From a cost perspective, this allows organisations to efficiently import data from multiple sources and then validate and consolidate onto a single platform. From an operational perspective, managed services can deliver actionable investment, performance and analytical data—such as an investment book of record—to a customised environment. Investment firms, in turn, get the benefit of in-depth analytics and business intelligence, but without the upfront cost of a new system implementation or the need to build out a team of experts to run the software.

The drivers and benefits are no different than those that are spurring interest in managed services in the EMEA region or in the U.S. But elsewhere, most firms that are looking to adopt managed services also have to contend with an added layer of complexity in retiring their legacy systems. To the contrary, APAC firms are able to take advantage of state-of-the-art managed services with greater ease and speed.

Globally, the demand for managed services is only growing as firms look to offload the operational and data management functions that no longer provide a competitive edge. However, asset managers and asset owners in Asia, largely unburdened by the baggage of outdated or obsolete legacy systems, are perhaps in the best position to benefit. With this foundation for successful adoption, we expect the demand for managed services to only become more pronounced in the APAC region.

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