2021 Asia Pacific Financial Services Regulatory Outlook 

The world continues to face a formidable common challenge in the COVID-19 pandemic. Yet the economic implications of and public health response to the pandemic has been varied between regions and jurisdictions. Regulators and financial services firms have naturally prioritised financial and operational resilience, while governments have provided unprecedented monetary and fiscal support to mitigate the effects of the pandemic.

As 2021 opens, Asia Pacific is in a unique position as compared to North America and Europe. While the COVID-19 pandemic has not yet reached its conclusion, ongoing infection and fatality rates appear to be better controlled than their global equivalents and vaccination programmes are commencing in multiple jurisdictions around the region.

As impactful as the pandemic was in 2020 and will continue to be in 2021, there are a number of other forces that will shape the business environment for FS firms in Asia Pacific in the coming year. These include macroeconomic developments (such as low interest rates and fiscal policy support); geopolitical tensions and rising national sentiment; the accelerated uptake of technology; cost pressures; and, the consequential impact of the above forces on talent models. With Asia Pacific potentially set to exit the extraordinary policy support measures and re-open economies earlier than the rest of the world, it is even more important to turn our attention to ‘what happens next’.

Our 2021 Asia Pacific Financial Services Regulatory Outlook considers all of these factors and presents a 'deep-dive' on nine topics that we believe will be important across financial services in AP this year:

• Financial and Systemic Resilience
• Role of Financial Services in the Recovery
• Holistic Approach to Non-financial Risk Management
• Business Model Transformation
• Operational Resilience
• Digital Risk
• Cyber Security
• Financial Crime
• Climate Change

It perhaps comes as no surprise that many of the themes in this 2021 Outlook have to do with resilience and sustainability, as in the ability for FS firms to respond with agility to a changing landscape; to weather market events with minimal service disruptions; and to work towards long-term sustainability of their business models. We also consider upcoming challenges presented by the application of new technologies and the looming threat of climate change. On top of this, we overlay questions about the role that FS firms should play as key actors in society – the high expectations and the need to preserve and strengthen their social licence to operate are even more relevant today.