If challenge is opportunity, then there is opportunity in abundance in today’s world of asset management.
Whether looking at the state of the world economy, China’s slowdown, the burden of ever-changing regulation or the boom in FinTech, FundForum Asia 2016 was squarely focused on the wave of change facing the industry.
With so much popular pessimism about the global economic outlook, there was a much-needed examination of what’s really going on. Many felt the media was overplaying the risks of a recession: the most serious danger was, in fact, the world talking itself into a downturn.
While many see low oil prices for the foreseeable, one Chief Economist explained why he thought a supply crunch was on the way. Regardless of OPEC policy, he said, get ready for prices around $65 a barrel by the end of the year.
What China crisis?
Of course China loomed large. With the country’s slowdown seeming to worry almost everyone in the mainstream media, at FundForum calmer heads prevailed. Yes, growth was slow but China was still a very positive prospect.
In a key session, FundForum looked at how to crack China, examining the pitfalls and potential of an economy that still has exceptional growth ahead.
We had insights into doing business in China from someone who has seen the country changed almost beyond recognition in the 20 years he has been there.
As for Asia as a whole, one panel member noted that by 2025 the region would be growing by the equivalent of the German economy every two years. There really wasn’t too much to panic about.
More disruption
With so much disruption, there was plenty to discuss, not least which disruptors should concern us the most.
For many the biggest disruptor has been regulation. Not just the amount of it but the gradual pace of its release. In a poll of audience members every single participant reported that they found regulation either problematic or very problematic. The ‘regulatory imperialism’ of the United States was highlighted as particularly burdensome for those managers who had to comply with US regulations despite having little to do with the US market.
The growth of alternative liquid assets has been remarkable in recent years. In a special session the FundForum looked at why the growth was happening and where the sector may be heading next.
The threats to cyber-security were examined along with worrying news that the way many firms are dealing with cyber-attacks may be 15 years out of date. While a firewall used to be the best way to keep hackers out, best practice now is to be prepared for an attack to succeed. The way institutions respond is crucial. So too is the way they understand the value of their data - such as the food manufacturer that was completely unaware that its systems could be used to predict military build-up at US bases around the world.
Shrinking growth
There was an examination of the net new flow growth into the asset management industry and a warning that rates of around 2% might become the new normal. But there was a reminder too that North Asia in particular has excellent growth prospects including China which would remain a market with meaningful and sustained net new flows. On an overall wallet size basis things looked positive.
All change
If this year’s FundForum Asia was about any one thing, it was about change. Change to the world economy, change in China and change in technology; change in the world and the way we do business. But it was also a reminder that engaging with that change offers excellent prospects to those willing to take it, those willing to adapt and innovate.
Watch all the video discussions
View all the expert discussion and commentary captured on video at FundForum Asia 2016. Click on the video below to watch the full playlist.