Banks advised to buy not build for Asia-Pacific market entry

Banks advised to buy not build for Asia-Pacific market entry

Credible, region-specific IT strategy is crucial to the success of foreign financial services firms seeking to gain new ground in Asia-Pacific, says a new report from Datamonitor.

The report, "Financial Services Technology in Asia-Pacific: riding the dragons," suggests that after negotiating the necessary regulatory hurdles, the big challenge for foreign institutions will be to get a sufficiently localised IT strategy in place on the ground, backed up by an infrastructure that can develop and manage products that are specifically tailored to the market in question.

Siân Jones, a financial services technology analyst at Datamonitor, comments: "There are already a number of major foreign players in the life and pensions sector that now have licenses to sell policies in India, for example, HSBC, Prudential, Standard Life and AIG all have a presence...Gaining an early foothold in a new market is a good way of establishing credibility."

Datamonitor believes that to offer the fastest possible time to market for these localised services, banks and insurers must look to external technology companies. Many already have a strong local presence and products specifically tailored to meet all necessary regulations and language requirements.

Packaged technology solutions for CRM, e-finance and multichannel banking also offer fast time to market which should give institutions the critical head start they need as players begin to pour into the Asia-Pacific market, says the research company.

Jones concludes: "Although many institutions still remain sceptical of vendor applications, an increasing number of FSIs are becoming aware that, in order to maintain a world-class offering, it will become more necessary to take a 'buy' rather than a 'build' approach."

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