Asean defence against disruptive tech
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ON THE MORNING of the first day of the "Malayan Banking Invest Asean 2015" conference in Singapore, the excitement among investors was palpable.
By 8.45am on March 31, nearly all 1,000 participants – consisting of 67 corporations and 452 investors from 11 countries – were seated in the main ballroom for the keynote address.
Nobody was taking the risk of not having a seat for the much-anticipated 11.25am event – the conversation with prolific author Michael Lewis. He was also on his first working visit to Asia.
In the investing world, reading a Michael Lewis book is deemed an unspoken baptism of fire for any investor worth his salt.
One is not a full-on Wall Street investor if one hasn’t read the requisite “Liar’s Poker”, “Boomerang”, “Moneyball”, “The Big Short” and Lewis’ latest, “Flash Boys”.
Lewis said he was flattered to be invited for an Asean conference.
“But I have to ask a question: Why was I invited? I wrote my books without thinking about engaging anyone outside the United States. So it’s really flattering that I am here,” he laughed.
Playing down the notion that he is a master disruptor, Lewis said that rather, it was the people he wrote about who were disruptors in their own space.
“The books have been disruptive. For me, I am more interested in the narrative,” he said.
From his experience writing about Wall Street, Lewis said people were now more loyal to markets, and not institutions.
People generally do not cause trouble in their own markets for self-interest. Lewis said that for markets to operate in a fair and efficient manner, it would be better for all investors to trade on a single platform, and eliminate the need for intermediaries.
“Be careful of the rules you create. The interaction between the financial sector and regulators is important. Don’t fragment the market,” he said.
As an example, Lewis cited the US Securities and Exchange Commission, which created a rule back in 2007 that, in fact, legalised a slow market.
In his book “Flash Boys”, which is based on a true story, the US regulators were aware of the high-frequency trading (HFT) taking place in the markets. HFT is financial technology created to enable the front-running of stocks, and ensure a profit. The significance of Asean in today’s world is growing.
About 60 per cent of Asean is made up of millennials – 18-34 years of age – and this group cannot be ignored. The average age of an Asian is 28.
With Asean making up 8.8 per cent of the world’s gross domestic product and some US$7 trillion in infrastructure spending to take place over the next few years in this region, all companies need to have an Asean strategy.
Maybank group president and chief executive officer Abdul Farid Alias in his keynote address said that as a single marketplace, Asean was the seventh-biggest in the world.
Companies should have three things in their plan – an Asean strategy, leveraging on disruptive technology to defend market share, and capitalising on the rising Asean consumer, he said.
In addressing disruption, Innosight managing partner Scott Anthony said disruption was simply when something complicated was made simple, or when something expensive was made cheap. It is when the status quo is shaken up, or when a simplifying technology is built around an existing business.
