The current frenzy over Chat GTP, AI Bots and the latest cutting edge technology overlooks the fact that a wide range of finance is still dependent on antiquated tools and outdated systems. finews.asia taking a look.
You can’t quite believe it at first when you see a fax machine and a teletype parked there, squat and rectangular, maybe even a little smug.
In a typical private bank, they are often located in the area near where the customer advisor assistants sit. Once, perhaps twice a day, an employee will go to the teletype and write a message or instruction, after which they will check the fax to see if anything new has arrived. You don’t ask what you really don’t want to know.
Sometimes you walk away, lured by curiosity – and wonder if you even know how to operate the fax machine. But, frightened by the number pad on the page, and the fact that you don’t even have a number to send anything to, you quickly give up.
Virtual antiques
It’s a slightly underhand, albeit thinly veiled, trade secret. The talk of crypto, NFT, AI and fintech is just that. Just as major financial hubs like Hong Kong use paper checks, many wealth managers and investment houses still rely on virtual antiques for basic tasks.
This state of affairs was reflected in a research report recently released by Calastone, the UK-based technology group owned by global private equity group Carlyle, which calls itself the largest global fund network.
In the report, which surveyed nearly 600 respondents around the world, they indicated that “a century’s worth of disparate systems and processes has resulted in a complex and fragmented landscape, with manual processes and old-fashioned technology such as fax machines still the backbone of many asset managers. ‘operations’. In other words, a mess.
Widespread in Asia
Apparently, private banks and wealth managers are not the only ones dependent on outdated tools.
Instead, it’s an affliction facing the entire asset management industry worldwide, with more than two-thirds (68 percent) of organizations relying on the venerable fax machine. There also seems to be precious little self-reflection of this fact, especially in Asia.
“In many cases, respondents across Asia considered themselves more automated than their European counterparts, but the use of fax – a tool many in Europe would consider outdated and irrelevant – is far more widespread in Asia,” Calastone indicated.
Heavy price
That seems to mean that regional finance leaders should seriously consider paying more than lip service to all the new technology out there, while reducing the number of awards dinners, fintech conferences and panel discussions they attend as eagerly as keeping that fax machine and teletypewriter. in the twilight zone between operations and private bankers demand a high price.
According to Calastone, citing a McKinsey study, asset managers who took advantage of the abundance of new technology, including updated APIs (application programming interfaces) and distributed ledger technology, saw very tangible benefits.
They were able to bring on institutional clients in half the time at a quarter of the cost, while funds under management grew twice as fast as the industry average and profit margins were 70 percent higher.
Just the start
But in truth, it’s probably just the beginning – as they didn’t even get into discussing Chat GTP, AI bots and all the other new stuff.
