At a Northern Trust advisory seminar held in Hong Kong last month, 50 percent of Asian pension funds and investment managers said they have either outsourced, or considered outsourcing, middle-office functions within the last five years.
However, only 38 percent said they have actually implemented any outsourcing project in that time.
Caroline Higgins, head of global fund services for Asia at Northern Trust, suggested that middle-office outsourcing could be a way for asset owners and managers to address the challenges and complexity that comes with new regulatory requirements, cost pressures, and a low-yield environment.
She said: “We expect to see more uptake of middle-office outsourcing in the region as institutional investors increasingly see the solution’s benefits.”
The survey also found that institutional investors are most influenced by the IT infrastructure of potential service providers, with 58 percent saying this is the ‘most important driver’ for their middle-office outsourcing decisions.
Cost considerations were the most important issue for 25 percent of attendees, while the other 17 percent named the providers’ scale as the most important driver.