Financial institutions are under constant pressure to reduce costs, improve operational efficiency, adapt to regulatory changes and grow their business. NRI believes that a combination financial knowledge and information technology are crucial to the industry’s growth and development. Through our lakyara reports, NRI identifies the various capital markets and IT issues impacting our clients and the future of their business.
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Chinese Capital Markets
In China, the emergence of financial products designed to circumvent regulations is changing relationships between conventional monetary aggregates and economic activity. Chinese monetary authorities have started to develop new monetary metrics to better conduct monetary policy.
With their assets under management showing signs of recovery, Asian hedge funds prefer to use full-service prime brokers that offer research and back-office capabilities and access to IPOs and Chinese stocks. The Asian prime broking market has consequently become an oligopoly dominated by major investment banks.
The Japanese asset management business is beset by an adverse environment, but it still offers substantial opportunity to new entrants from overseas. Ample scope for growth still exists for new entrants that can meet the needs of investors periodically replacing underperforming asset managers and financial institutions' need for portfolio diversification.
IT & Operation
The information found in financial statement footnotes is essential for company analysis. However, footnote content and presentation are highly company-specific. While XBRL reporting of footnoted information promises to improve analytical efficiency, filers' cost burden is a concern. The US has started to phase in XBRL reporting of financial statement footnotes. The US authorities are listening carefully to investor feedback and providing wide-ranging support to filers.