Fast Forward: Transformative technology in the evolution of the buy side — Eleanor Seet

Our Fast Forward series explores how the buy side deploys transformative technology to prepare for the next chapter of the industry.

Fast Forward with Eleanor Seet, Head of Asia ex-Japan and President, Nikko Asset Management Asia Ltd and founding member of the Bloomberg Women’s Buy-side Network (BWBN)

In this edition, we speak to Eleanor Seet, Head of Asia ex-Japan and President, Nikko Asset Management Asia Ltd, offering solutions for global investors capitalizing on Asia’s dynamic economies.

Digital Transformation in the Buy-Side: A New Era of Investment

I oversee Nikko AM’s Asia ex Japan business and am based in Singapore. I am a passionate advocate for diversity and inclusion, and a founding member of the Bloomberg Women’s Buy-side Network (BWBN), an initiative dedicated to empowering and uplifting the next generation of female leaders on the buy-side.

“AI and ML will continue to revolutionize investment processes through predictive analytics, risk assessments, and algorithmic trading. For instance, Nikko AM Investment Teams are increasingly leveraging AI tools to analyze vast datasets and identify emerging market trends.”

The Buy-Side Revolution

Embracing Cutting Edge Technology

Artificial Intelligence (AI) and Machine Learning (ML), as well as Blockchain and Distributed Ledger Technology (DLT), and Big Data and Advanced Analytics are set to play an increasing role in the buy-side.

AI and ML will continue to revolutionize investment processes through predictive analytics, risk assessments, and algorithmic trading. For instance, Nikko AM Investment Teams are increasingly leveraging AI tools to analyze vast datasets and identify emerging market trends. Specifically, tools such as natural language processing can improve data analysis from diverse sources like news, social media, and financial reports.

AI systems are also being used to analyze news sentiment and its potential impact on stock prices. Additionally, there is a greater investment in AI for operational and analytical improvements within the industry, with some institutions employing machine learning to refine their trading strategies and enhance business performance.

Superior Decision Making and Robust Security in the Buy-Side

By consolidating investment, financial, and customer/sales data into a rich, centralized repository, organizations can ensure that this valuable information is more readily available and accessible for advanced analytics capabilities. Not only can this help empower businesses to leverage data-driven insights more effectively, it can ultimately help enhance the quality of our decision-making for the clients we serve.

Cloud computing is a critical enabler in this technological advancement. Its scalability, flexibility, and ease of global deployment address key challenges such as internal and global scaling, capacity management, and time to market. The expertise of experienced and reliable cloud providers helps ensure that these benefits are realized without compromising security.

The importance of cyber and data security cannot be overstated. As companies increase their investment in these areas, they need to not only safeguard their data but also meet regulatory obligations and support business initiatives. Preventing and detecting data theft becomes paramount to ensure that sensitive information remains protected.

Buy-Side Rides Tech Wave

With the importance of having high-quality data in mind, the buy-side is leveraging new technologies to enhance data utilization, with the aim of improving trading strategies, and diversifying investment portfolios.

Three examples of the ways the industry is doing this today: enhanced data utilization with AI-driven insights and personalization; algorithmic and quantitative trading; and diversification of asset classes and geography through technology.

Digital Natives Transforming Investing Landscape

As firms must strive to meet the evolving needs of investors, we are witnessing a significant shift in demographics driven by technology.

Millennials and Gen Z are increasingly becoming active investors, drawn to digital platforms and automated solutions. These younger demographics are more comfortable with technology and seek intuitive, user-friendly experiences.

Alongside institutional investors, we have observed that tech-savvy investors demand transparency and accessibility in their investments, as evidenced by the popularity of platforms that offer comprehensive analytics and reporting tools.

Platforms that offer comprehensive analytics, reporting tools, and easy-to-understand information such as robo-advisors have gained popularity. Some of these robo-advisors are able to provide affordable financial advice through AI-driven algorithms. This has made investing accessible to a broader audience, including those with smaller investment amounts.

Uniting for Financial Literacy and Championing Inclusion in the Industry

Buy-side firms can contribute significantly to increasing financial and technological literacy by providing educational resources, fostering collaboration, and ensuring technological accessibility.

Collective effort will help create a more equitable and inclusive industry where individuals can make informed investment decisions and benefit from the opportunities it offers.

Establishing collaborative partnerships and platforms create synergies within the buy-side industry. Collaborating with educational institutions can help develop structured financial literacy programs.

The Bloomberg Women’s Buy-side Network (BWBN) plays a pivotal role in developing the next generation of buy-side leaders in Asia. It’s the first women’s buy-side network of its kind in Asia, serving as a support system and platform for members, to promote meritocracy and inclusion in the industry, and educate on the diverse career paths on the buy-side. BWBN had its genesis in Singapore in 2018 and has now expanded to 12 chapters globally.

Since the inception of BWBN in APAC, we’ve been intentional in nurturing the next generation of female practitioners. Mentorship isn’t just a strategy; it’s a personal investment both ways. Having someone who believes in you, offering a different perspective and being in your corner is invaluable. Quality feedback is like gold. It’s a privilege and a unique opportunity for us as a community to share experiences with the next generation of talent in Asia’s buyside community.

Industry Regulation

Evolving Regulatory Landscape for Emerging Asset Classes

The introduction of new asset classes, such as digital assets, has necessitated a significant shift in the regulatory landscape. Financial institutions offering these new products face heightened risks related to data privacy, information security, financial crime, and mis-selling.

To address these challenges, regulators worldwide have been actively implementing new frameworks and legislation specifically tailored for digital assets. For instance, the European Union has established a comprehensive regulatory framework encompassing crypto assets, issuers, and service providers, including the Markets in Crypto Assets Regulation (MiCA).

In Asia, the Monetary Authority of Singapore (MAS) has introduced cryptocurrency-related amendments to the Payment Services Act, focusing on digital payment token service providers. Additionally, MAS has published guidelines for digital asset custody. Similarly, the Securities and Futures Commission (SFC) in Hong Kong is expanding the scope of its regulations to cover virtual assets through the implementation of the SFC’s Hong Kong virtual asset trading platform regime.

These regulatory developments demonstrate a proactive approach to managing the risks associated with emerging asset classes and ensuring the stability and integrity of the financial system.

Enhancing IT Infrastructure for Buy-Side Firms

Buy-side firms must prioritize the implementation of stringent cybersecurity measures to safeguard their IT infrastructure. Adherence to relevant regulations is paramount. For instance, in Singapore, financial institutions (FIs) are required to comply with the MAS Notices and guidelines on Technology Risk Management, Notice on Cyber Hygiene, and MAS Outsourcing Guidelines. Similarly, in Hong Kong, the SFC Guidelines for Reducing and Mitigating Hacking Risks Associated with Internet Trading, the Cybersecurity Guidelines and FAQs, and the Code of Conduct for Persons Licensed by or Registered with the SFC provide essential guidance.

Talent management and skills development

Building a Future-Ready Workforce

In today’s rapidly evolving technological landscape, it’s imperative for organizations to invest in their workforce’s development. Nikko AM encourages online learning through platforms that the organization is subscribed to. Employees are empowered to continuously upgrade their skills through courses ranging from soft skills to technical competencies like UX, Web and Mobile Design, and Cybersecurity. This not only enhances individual capabilities but also aligns the workforce with current tech trends.

Embracing emerging technologies like AI can drive innovation and efficiency. Nikko AM’s exploration of Azure OpenAI is a proactive approach to integrating AI into business processes. By fostering a culture of learning, adaptation, and technological adoption, organizations can equip their employees to thrive in the ever-changing digital age.

Looking back … and Fast Forward

I’ve been incredibly blessed to have spent my career in the buy-side industry. The incredible network of professionals I’ve met along the way has not only shaped my career but has also enriched my life. I’ve made lifelong friendships and discovered the power of collaboration and genuine connections.

One of the most valuable lessons I’ve learned is the importance of resilience and perseverance. Over time, these qualities can lead to remarkable achievements. Throughout my career, I’ve faced challenges and uncertainties, but I’ve been inspired by my mentors to embrace opportunities and expand my skills. I’m eager to be part of this growing BWBN community that is seeking to support the next generation.

It is essential to maintain a balance between hard work and self-discovery. Finding your voice and your unique story takes time, so be patient with yourself. Growth in a new environment can be challenging, but it’s incredibly rewarding.

Don’t get too caught up in the end result; the journey itself is often more significant. Celebrate small victories along the way, keep investing in yourself personally and stay curious. With dedication, the right mindset and a fostering community, we will surprise ourselves with what we can achieve together.