The report called “Project Blue: Capitalising on the rise and interconnectivity of the emerging markets: Financial services in Hong Kong” has concluded that rapidly accelerating growth and increased intra-trading across South America, Africa, Asia and the Middle East is leading to a “radical shake-up in the competitive environment for financial services businesses in Hong Kong”.
PwC also introduces us to a new acronym, SAAAME for the regions under discussion within the report, and suggests companies within developed economies may want to find opportunities to participate in the increased trade between these regions.
Peter Li, PwC banking & capital markets leader for Hong Kong said: “The rise and interconnectivity of the emerging markets of SAAAME is in many ways a deep and far-reaching development for the financial services sector, but it is one which has so far taken shape with little fanfare and attention. The value of intra-SAAAME commerce is growing much faster than trade flows to and between developed markets.
“Financial institutions which are struggling to sustain competitive relevance may find that tapping into this emerging-to-emerging market commerce offers them a myriad of growth opportunities.”
The report argues that as intra-SAAAME commerce continues to grow Hong Kong, “in particular its financial services institutions”, is set to play an even bigger role than it already does as a gateway for international trade, especially between SAAAME and China.
It added that the experience of Hong Kong in helping “customers open up trade and investment links with China” will prove useful in developing new trading relationships and overcoming potential barriers in other parts of SAAAME.
“The challenge for Hong Kong’s financial services organisations is to work out how they can provide the international presence and full service support that their customers require as they develop their business in new markets,” said Harjeet Baura, PwC Hong Kong financial services partner.
“Working closely with their customers and being able to follow them as they reach into new markets will be critical in helping to judge what regions and sectors to focus on. They can then work with their customers to help bridge gaps in the local financial infrastructure and overcome challenges in areas such as financing, risk management, currency convertibility and repatriation of revenues.”
