The Gentle Touch

The call to be in Asia is alluring. As the world’s largest, most-populated continent, it covers roughly 17,212,000 square miles—about 30% of earth’s total land area. 

Asia is home to China and India, which have two of the world’s biggest populations. According to statistics from the United Nations Department of Economic and Social Affairs, as of July 2018, China had a population of roughly 1.42 billion, followed by India with 1.35 billion. The two countries account for about 36% of the world’s population of 7.6 billion people.

This is one of many reasons why global firms headquartered in the big financial centers, such as New York and London, are keen to “get into” Asia. The populations of China and India alone are enough to sustain the companies’ revenues, assuming these firms succeed in providing their goods and services there. 

The continent is not only known for the size of its population; it is also extremely diverse. Considering languages alone, there is Mandarin, Japanese, Thai, Tamil, Hindi and Malay, to name a few, and I haven’t gotten to the different dialects yet. While Europe, of course, has its own battery of languages to deal with, the sheer size of the Asia-Pacific region means newcomers can’t rely on proficiency in any one language, such as English or German, and expect to get by.

The number of countries in Asia also means firms operating there have many different regulators to contend with. And the region’s financial markets can’t be compared with each other as though comparing apples with apples. Take two central banks—the Monetary Authority of Singapore and the Hong Kong Monetary Authority. While they are seen somewhat as competitors, the projects they deal with and the way they execute reforms or implement regulations are quite different. 

That said, those that are prepared can see the opportunities and are able to implement their expansion plans in the region. 

Recently, New York-based trading and low-latency data infrastructure technology provider Pico Quantitative Trading told WatersTechnology that it plans to add another 20 datacenters in the next 18 months. The locations it hopes to operate in include Australia, China, India and South Korea. 

Pico’s managing director and global head of product, Roland Hamann, found local firms lacked a reliable “one-stop shop” provider for services such as co-location and trading, as well as back-office trade processing. He mentioned that tier one investment banks in particular would prefer to have the exact same service in many different locations, rather than have slight variations from an operational perspective.  

Of course, he added, there is a regulatory challenge when expanding into Asia. In Europe, for example, rules and regulations are more standardized, making it a much easier process when it comes to onboarding clients in different European venues. In Asia, there could be subtle differences country by country—and even pronounced ones. 

For example, when a client orders a cross-connect in Europe, it can be set up in two days or less. In Asia, the usual delivery time is between four and six weeks. This could hinder time-to-market for financial service providers, particularly when clients aim to branch out in a certain region or country. 

But that is not stopping Pico. Hamann relocated from London to Singapore in late 2018 to drive the firm’s regional expansion. Since then, he has grown Pico’s Singapore team to about 20 people. 

This includes the hires of former FIS and Newedge tech exec Nicolas Friceau as global head of datacenter engineering, former Colt sales exec Jasmyne Tung as Asia-Pacific regional head of sales, and former BT and Credit Suisse exec Elton Pang as regional head of service operations.

Pico also has two employees in Tokyo, and is aiming to add staff in Hong Kong soon. 

So, it’s not that it’s impossible to set up shop in Asia, it just takes a carefully calculated and carved-out approach—one that may be radically different to what western companies, particularly those in the US and Europe, may be used to.