Utilizing the advancements in technology to deliver safe financial information to a wider customer base is essential to grow markets in Asia, Tomas Franczyk writes in an exclusive essay for finews.asia.

Conventional wisdom dictates that quickly developing markets are fast approaching levels of sophistication that is more commonplace among investors based in the Western Hemisphere. This conventional wisdom is outdated.

I can say with confidence that investors in the APAC region are increasingly sophisticated and are often being underserved in terms of financial technology. It is time for the rest of the world to catch up. Luckily, some are taking notice.

Ahead of The Curve

What I have seen in my years based in Hong Kong is that investors in the Asia-Pacific market are already more sophisticated in their trading behavior and are in need of increasingly sophisticated financial technology to meet their needs.

One piece of evidence of this: some regional Chinese brokers are establishing U.S. representative offices and applying for FINRA licenses so that they can operate as brokers in the U.S. That is all good and fine and helps make our financial universe more interconnected, but why should they have to do that?

Chinese investors show the same levels of ability and sophistication as their counterparts in the U.S. and Europe, but what they need to do their jobs is the same levels of information not currently available.

These investors are very well informed about Chinese ADR and feel comfortable trading these stocks, but need more information to trade U.S. stocks and they do not have the same level of information as investors outside of China.

Fintech Takes the Lead

I am not the only one who has noticed this problem. Venture capital and private equity firms have invested significantly in financial technology and mobile applications (a must-have in Asia where a larger share of business is conducted with mobile devices). Utilizing the advancements in technology to deliver safe financial information to a wider customer base is essential to grow markets in Asia, where technology is trying to keep the pace with demand.

More technology is being developed on the ground in Asia to handle this problem, but these technologies already exist and are in use in Europe and North America. Failure to bring these products to Asia with deliberate speed is perhaps one of the greatest errors that market technology players could make right now. The APAC market is only going to grow in participation and sophistication is already ahead of where many Western players estimate.

Catching up With Asia

For our part, Nasdaq has recognized the sophistication of investors in China and the rest of the APAC region. Our acquisition of eVestment, which has an office in Hong Kong, increases the reach of its analytics that incorporates macro-level industry research, competitive analysis, due diligence and automated data.

We have expanded the network of regional data vendors providing proprietary Nasdaq data, including Nasdaq Basic and Nasdaq Last Sale, to downstream financial institutions. Our Analytics Hub is delivering signals for sophisticated investors from proprietary data through such products as PredictWallStreet and the recent addition of the Prattle Corporate Sentiment signals that provide new analytics to drive investment decisions.

The developments serving the APAC market are significant, but they are just beginning. More time, money, and energy needs to be invested to bring the right products and services to investors in Asia. The rest of the world is catching up in realizing the levels of sophistication already in play in APAC.


Tomas Franczyk is an associate vice president with Nasdaq based in Hong Kong where he serves as a managing director for the APAC region. He was previously based in Copenhagen where he directed European and Asia Pacific sales. He had served as sales director of OMX prior to its acquisition by Nasdaq.