"We are aggressively developing our regional offering to investors in Asia who are now maturing and investing more in the region, and also expanding our fund services capabilities," Paul Hedges, global securities services head, told The Asian Banker.
Standard Chartered plans to launch local fund services in Malaysia and Thailand by the end of 2005, following the introduction of this business in Indonesia 18 months ago. Hedges notes that in Malaysia and Thailand, local investment instruments have been developing well, there is a healthy interest in new investment products and personal disposable income has improved.
Fund services was first launched in Singapore and Hong Kong in 2001 and 2002, respectively, where it had the most successful new business launches. Within eight months, the bank recovered its cost of investment.
Other markets that will be a priority are Korea, where the bank has acquired Korea First Bank, and China, where the developments with qualified foreign institutional investors augurs well for growth of the market. Standard Chartered is also enhancing its fund accounting service to offer foreign language reporting in China. On a broader note, it is also looking at developing more complicated performance analysis, commission capture, transition management, among others.
Assets under administration has seen tremendous growth, rising 52 percent in 2004 from the previous year’s level, and transaction volumes went up by approximately 50 percent for the same period.
"Three years ago our assets under administration stood at $100 billion and the last number we published was $290 billion so you can say over three years the business is three times bigger in terms of what we look after," Hedges said.
Meanwhile, the bank is centralizing its platforms to provide consistency in product delivery and to manage costs better.
"The model we currently have is that our custody platform is independent in each of our countries. We have initially moved the server technology for a number of banks’ systems to Hong Kong from individual places. The next objective will be to have just one platform where everybody has a view in, globally, and again different locations and different things," he explained.
The bank also plans to centralise its fund accounting platform to Chennai before the end of the year. The platform is currently accessible physically via Hong Kong, Indonesia and Singapore.
Another area of technology improvement is in the India derivatives clearing process.
Standard Chartered recently launched its derivatives clearing solution in India. This covers clearing and settlement of derivatives (index futures, index options, individual stock futures, individual stock options, interest rate futures) trades done on India’s National Stock Exchange.