[ M A R K E T R E V I E W | A S I A ]
Much has been made of the opportunity for asset servicers in Asia Pacific , but as the market continues to grow custodians are being confronted with the challenge of operating in a region characterised by highly fragmented regulatory environments . Unlike the more unified frameworks in Europe or the US , Asia ’ s regulations differ markedly from country to country , requiring deep local expertise and a strong on-the-ground presence . Moreover , asset managers and owners in the APAC region often operate on a more localised basis , which necessitates that custodians provide adaptable and localised solutions . The need for a regional presence , rather than relying solely on hubs like Hong Kong , is becoming increasingly important for custodians aiming to cater to the diverse and growing markets within APAC . “ Custodians must develop strategies tailored to each market . This includes having local language capabilities , regulatory experts , and partnerships in place . It ’ s essential for custodians to understand that a significant portion of assets are managed and invested locally ,” says Camilo Ramirez , managing director of Financial Markets and Private Banking at SIA Partners .
AUM growth in APAC Looking at recent data from SIA Partners reveals a significant upward trend in AUM [ assets under management ] in the APAC region , with projections indicating a compound annual growth rate ( CAGR ) of 35 %, from $ 15 trillion in 2018 to $ 30 trillion by 2027 . The data suggests that this growth in AUM is mirrored by a corresponding increase in assets under custody ( AUC ) in the region . Key custodians such as Deutsche Bank , State Street , HSBC and Citibank are key players in this growing market , and as AUM continues to rise , so will the market share of these custodians in APAC ’ s custody sector . The rapid AUM growth in the region is influenced by a range of socio-economic factors , and while much attention is often placed on China , the growth story extends far beyond – encompassing countries like India , Taiwan , Malaysia , and Indonesia . “ These countries are experiencing substantial corporate growth and accumulating assets . However , as these nations become less cost-efficient compared to emerging markets , new opportunities arise in other areas of the region ,” Ramirez notes . This shift has opened new opportunities in other parts of the region . For instance , Malaysia ’ s strategic location near China and West Asia is fuelling its rapid growth , while Indonesia