Two decades of lost opportunities in Asia for Australian financial services

| February 24, 2019

As international financial service groups stream into Asia to establish operations, the self-imposed absence and withdrawal by Australia’s leading institutions are lost opportunities with long-term ramifications.

What makes the situation so disheartening is that decades ago pioneering Australian life insurance companies had foreseen the commercial opportunities and headed north.

They were literally ‘ahead of the game’ having obtained operating licenses, entered into JVs with local operators or set up offshore offices in countries that would soon be economic powerhouses in Asia Pacific.

Unfortunately, during my years away, the industry in Australia went on a frenzy devouring itself.  One household brand after another was lost in a steady stream of amalgamation and buy-outs that saw one group after another disappear until only the four major banks and AMP remained.

Not only did we lose long established groups like Colonial, Norwich, Scottish Amicable, Legal & General, T & G, Prudential, National Mutual, etc. – but in the consolidation process the ventures and operating licenses in Asia were jettisoned.

Instead of going on to become global players growing in parallel with the economies of Asia, Australian institutions retreated preferring to become big fish in a rapidly shrinking local financial services pond.

As Aussies exited, international players eagerly descended and filled the vacuum they left behind.

The number of financial service groups from Europe and North America in the Region continues to grow and join the ranks of Japanese, Korean, etc. institutions that are also expanding their operations throughout Asia Pacific.

The industry is contributing significantly to the GDP of economies in which they operate by providing employment/upskilling opportunities for the populace in the much needed professional and administrative sector and self-employment for financial advisers.

In addition, the companies fund school programs that teach financial literacy to young people – sponsor community based personal safety awareness initiatives such as providing bike and motor scooter helmets for riders…and the list goes on!

Looking to the future, there is a place for Australian financial services expertise and know how in Asia Pacific.

The fundamentals that acted as a beacon, attracting life companies’ decades ago are still present today for Australian financial services – especially in the latest rising star nations of Cambodia, Laos, Myanmar and Vietnam.

However, time is rapidly running out and failure by Australian financial service companies to embrace a regional mindset and come out of the self-imposed isolation will result in their ultimate demise.