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Schroders buys stake in fintech

Digital_communicationSchroders has purchased a minority stake in the first fintech firm to join its fintech accelerator programme, Cobalt.

Qwil Messenger, which is designed to enable asset managers to communicate directly and securely with clients through a single app, was the first startup to be signed up to Schroders’ Cobalt programme at the beginning of the year.

The financial terms of the investment have not been disclosed, although Schroders will take a seat on the Qwil board, and the asset manager says the deal is “tangible evidence” of Cobalt’s success.

“We have been working with Qwil for nine months, during which time we have licensed the software, piloted it and got to know the product and the team very well,” said Charlotte Wood, head of innovation and fintech alliances at Schroders. “We believe it can be an industry-wide product and we want skin in the game.”

To this end, Schroders is encouraging Qwil to meet with other asset managers and helping to arrange introductions. “A lot of the benefit of a product like Qwil comes from the network effect,” said Wood.

Meanwhile Qwil’s co-founder and chief executive Peter Reading said the investment was a “real show of support for the work we have been doing since joining the Cobalt programme”.

Qwil began working with Schroders in February and developed a live service in July that is now being rolled out across various professional services sectors.

Schroders is currently using Qwil in its wealth management division but, says Wood, its application could be anywhere across the firm. The asset manager is also working with Qwil to see what additional services could be developed for asset managers, for example, additional recording capabilities for regulated communications.

The issue of client communications has become more topical of late due to the implementation of the General Data Protection Regulation and an increasing concern over data privacy. Qwil also addresses some of the technical limitations of other corporate messaging services, such as the inability to include external parties in conversations.

Qwil is currently the sole participant on Schroders’ Cobalt programme, although the asset manager is expecting to make new additions in the first half of 2018.  

Nor is eventual investment a pre-requisite in selecting a candidate, said Wood. “It is more important that we are using the product ourselves and giving our feedback on what it useful.”

It is seemingly a busy time for fintech accelerators in the asset management industry and for some of Schroders’ operations executives.

Its chief digital officer Graham Kellen is also chairman of the advisory board for VeloCity, the UK Investment Association’s own fintech accelerator which announced the first cohort of startups to join the programme this week.

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