banks, financial services
A bright light in the Asia/Pacific region's financial services industry is the emergence of super-regional institutions, which we define as Asia/Pacific-based organizations that have made aggressive moves to acquire operations across the region. Their regionalization objectives are intentionally more paced, however, and they have chosen to manage regional units that are close in proximity, and limited to one part of the region. We have tracked ten super-regionals closely this year, namely: ANZ Bank (Australia), Commonwealth Bank of Australia, DBS Bank (Singapore), OCBC Bank (Singapore), UOB Bank (Singapore), Maybank (Malaysia), CIMB Bank (Malaysia), Mitsui Sumitomo Insurance (Japan), Sumitumo Mitsui Banking Corporation (Japan) and Tokio Marine (Japan).
In the recent ASEAN Bankers Association forum which I spoke at, this super-regional theme captured a lot of attention, primarily because the bank presidents wanted to find out what their peers were up to in the Asian-wide M&A space. I also spoke of the lack of a credible super-regional story out of banks in Thailand and Indonesia – from where super-regionals should have emerged by now.
From the global realignment forced by the recent crisis, it also appears that there have also been super-regional strategies being launched out of banks in Latin America. Also, the super-regional story is apparently not just in financial services, because Asian-based companies from other industries have also made moves to go beyond their home markets, especially as the recent downturn resulted in global incumbents focusing more on their home markets in the US and Europe. It can be said that although super-regionals are filling in some of the vacuum left by retreating global players, we believe that super-regionals themselves are creating their own unique propositions as truly Asia-centric powerhouses.
What implications does the emergence of super-regionals have on technology decision-making?
The super-regionals' technology strategies are understandably distinct from domestic-focused institutions. These will be brought to life in region-wide platforms that are more than likely standardized applications and assets that will be used across the organization's various operations in the region. There will be country- or market-specific overlays, but the real and ultimate drive would be toward a common platform.
In the core banking space, a few super-regionals have just recently made decisions on their core banking vendors, and a few more decisions are tipped to be made within a year. Super-regional core banking will be a key theme in this area in the years to come. These deals will be handed to a wider number of vendors than expected, preventing an oligopoly of super-regional references for just a few core banking vendors.
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