Foreword
Opportunities in emerging markets – from India to Africa – are reappearing on the radars of institutional investors, fueled by a range of technological advancements. At the same time, unlocking greater efficiencies remains a top priority for our clients as they expand into new products and markets while grappling with increasing costs, growing competition and a challenging geopolitical environment.
Across our global footprint, we are excited to see our clients taking the initiative to develop their own data strategies, leveraging the ever-growing array of advanced technologies, not least among them being artificial intelligence (AI). In this issue we focus on the theme of Transforming emerging markets through digitisation and collaboration, two approaches that will help investors as they sharpen their focus on opportunities across Africa, the Middle East and India, in a difficult operating environment.
Our first article, Custodians refine their data strategies, explores how adopting a coherent data strategy is essential if custodians and financial market infrastructure providers are to set themselves apart from their peers and develop new product offerings. We see that custodians are embracing AI to automate manual processes, with impressive results. However, before focusing on technology, there’s a need to go back to basics – by delivering meaningful data and placing robust controls to protect that data and to comply with client requirements and regulatory mandates.
As we note in the article Gaining a foothold in India, those seeking to access the country’s booming capital markets will need to be aligned with its trading and settlement regulations, which has moved ahead of developed markets by introducing a beta version of T+0 settlement in March.1 On the other hand, advancements in the settlement process are offset by the intricate and cumbersome aspects of India’s pre-investment process (i.e., account registration and KYC), which investors will need to navigate.
From India, we move to an emerging asset class that is also attracting growing institutional interest: digital assets.
In Three reasons why digital assets deserve an independent custodian, Waqar Chaudry, Executive Director, Innovation and Digital Assets Product, Financing & Securities Services, discusses why clients should consider the optimal regulatory framework and custody operating model when considering this asset class. The article also emphasises the importance of having best-in-class technology to ensure seamless connectivity and easy access.
Further afield, although Africa’s markets have been quiet in recent years, we see a revival of domestic and offshore investor interest. To sustain growth, though, Africa’s capital markets will need to advance reforms in three key areas: administration, local market ecosystem reconfiguration, and market deepening. These reforms require inter-government cooperation and alignment with international standards and practices, including settlement, as well as the embrace of technological innovations.
1 https://www.livemint.com/market/stock-market-news/t0-settlement-kick-starts-today-what-does-it-mean-how-does-it-affect-you
The article Commit, collaborate, consolidate: The way forward for Africa’s financial markets includes some of the key takeaways from the “Africa in the Year 2030 – a forward look into the next 5 years” panel at our annual Frontier Day event in London. The panel discussion is one example of how Standard Chartered continues to engage in and expand our conversations with regulators to better support clients interested in taking advantage of what these markets have to offer.
In between the sizable markets of India and Africa sits another that also has been a magnet for foreign investment flows in recent years. The United Arab Emirates (UAE), thanks to a combination of regulatory initiatives, growing investor interest and cutting-edge technology, is now home to a burgeoning funds sector.
Our final article, Tech-powered custodian services to support fast-growing UAE’s funds industry, focuses on where investors see opportunity in the region, and the crucial role licensed fund service providers and custodians perform in this rapidly growing market. The article also highlights the unique advantages offered by our broad product set and our efforts at deploying technology to create solutions that can meet the increased compliance and performance measurement demands of the market as it further matures.
Looking forward, we are excited by the opportunities taking shape in the emerging markets we operate in. As with more developed economies, we believe technology will be a key driver of transformation in emerging markets. And while the depth of digitisation may vary, our clients can find comfort in our approach to consistently invest in building best-in-class digital and data capabilities to support them wherever their business takes them.
Margaret Harwood-JonesGlobal Head, Financing and Securities Services,Financial Markets
