The Hindu Business Line : Australia: Emerging hub for financial analytics off-shoring

AT A recent seminar, the Australia-India Business Council and the IIT Association of Australia presented the case for making Australia a global hub for financial services analytics off-shoring.

Early deregulation of the Australian financial services sector, the availability of a pool of financial professionals and multilingual capabilities are key factors giving the country an edge over competing offshore centres in securing financial services analytics projects from large European and North American financial institutions.

"In Australia there are 2000 fully qualified actuaries," said Mr Sriraman Annaswamy, founder of Swamy and Associates. "This compares with around 200 fully qualified actuaries in India."

In addition to opportunities in actuarial, insurance and funds management analytics, Mr Annaswamy's research has identified additional financial services analytics opportunities in retail banking, corporate credit and investment banking, strategic financial management and strategic business intelligence and research.

Mr Annaswamy expects countries such as India, China and South Africa to develop skill-sets quickly to meet the global demand and believes there will be opportunities for collaboration between Indian and Australian providers of financial services analytics.

"More and more third party analytics specialists are becoming increasingly sophisticated and are looking to develop strong domain capabilities. They are looking to actively expand their delivery centres globally to countries outside of their current delivery locations, mainly India" he said.

"Business continuity planning methodologies are also forcing service providers and clients to diversify delivery locations with more reliable infrastructures."

Large financial institutions and knowledge process outsourcing providers cite difficulties in finding a large pool of qualified financial professionals in the same location as other attractive factors such as cost competitiveness, domain expertise, reliable infrastructure and multilingual capabilities.

Financial deregulation in Australia over the past two decades has encouraged the introduction of new and more complex financial products and services. This has transformed the country's financial sector and provided Australian finance professionals with significant domain expertise.

The deregulation process accelerated after 1983, when the Australian dollar was floated and interest rate and lending controls were removed. By 1993, authorised foreign banks were allowed to operate branches and compulsory super-annuation was introduced.

In December 2003, Australia's investment fund assets pool, valued at $519 billion, had grown to become the largest in Asia and fourth globally.

Last year, the Bank of International Settlements reported that the daily foreign exchange market turnover was higher in Australia than it was in Switzerland.

Financial sector liberalisation has given Australia the domain maturity and expertise to provide full analytics support.

It is also reaping the benefits of liberalisation of labour (immigration) policies over recent decades.

Sydney and Melbourne are among few cities in the world where all the key Asian languages are spoken. In addition, the continent is also home to a range of continental European language-skills.

The Australia India Business Council chairman, Mr Neville Roach, commented that Australia today had a "real window of opportunity" to attract financial service analytics projects from Europe and North American financial institutions.

(The author is Associate Director, Asean Focus Group, Sydney.)

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