[ MARKET REVIEW | ASIA ]
is transitioning from a primarily agricultural and mining economy to a hub for services . These developments are contributing to a broader regional expansion in wealth and trade , propelling AUM growth across the APAC landscape . As we pointed out earlier this year , a growing middle-class and increased wealth generation has also resulted in increased inflows to products such as insurance , mutual funds , and unit trusts . Alternative investments have also gained traction in the region , with more and more investors putting their assets into private markets . All of this combined has created a melting pot of opportunities for investors and providers alike as clients looking to broaden their geographic reach are turning to their securities services providers to help facilitate that . What is unique about Asia is the distinct individuality you will find from one market to the next . Clients will look for partners who are attuned to those market nuances – whether that be from a regulatory , infrastructure or market trend standpoint .
The rise of digital asset custody In addition to those established trends , Ramirez explains that digital assets have rapidly emerged as a significant area of interest for custodians in APAC . As traditional financial institutions start to explore opportunities in digital assets , including tokenised commodities and cryptocurrencies , custodians are evolving their systems and operating models to address these new asset classes . “ Traditional custodians , previously resistant to digital assets , are now exploring these opportunities . For instance , HSBC has ventured into tokenised gold , marking a shift towards embracing digital assets . The extent of adaptation often depends on how willing these institutions are to take on the risks associated with digital assets ,” Ramirez explains . However , the degree of adoption varies widely depending on market readiness and risk appetite . Regulatory environments play a crucial role in shaping the extent of digital asset adoption in different markets . While China imposes stringent regulations on digital assets , making it challenging to establish a digital asset custody business , other markets like Hong Kong , Singapore , and India are more receptive . The Middle East is also emerging as an open market for digital assets – as evident by this week ’ s news from Standard Chartered which launched a digital asset custody service in the UAE . Custodians must strike a balance between their risk appetite and the local regulatory frameworks to navigate this evolving landscape . The key to success lies not in attempting to cover every aspect of digital assets , but in focusing on those that align with their strategic goals and market conditions .
Streamlining onboarding : the need for digital collaboration Onboarding clients in the custody and securities services sector has traditionally been a manual and labourintensive process , often involving extensive testing and troubleshooting . While compliance with local regulations is generally straightforward , managing the internal risk protocols during onboarding can be challenging . Ramirez emphasises the importance
22 Global Custodian Fall 2024