Funds Europe – Where do we find the major inefficiencies/frictions in asset management and is technology evolving to remove these?
Pilbeam – One of the frustrations has been the age-old quest from clients to provide them with the right information in the right format at the right time. That time is often dictated by the client: whether that’s providing fact sheets, providing real-time access to holdings or insight commentary, underlying portfolios for either clients or research meetings. We’re really looking at technology to help and evolve. Nobody gets it right every time, but I think with asset management firms, we’re piling relatively huge amounts into investing in technology. I expect to see significant change there, with technology’s help, over the next couple of years.
Duval – I agree. We really are stone-age in the reporting area compared to other industries. If you look at a mobile phone and what you have on it, whatever your interest is, you have immediate, instant access to everything. But when our clients want to have access to their portfolio, it’s really a painful and costly journey. We need to move on quickly, because as was underlined before, with sustainability, ESG, and the impact themes are taking control of our industry. That’s what clients want and that is what is good to do for our industry, we need to be able to report precisely.
Creswell – We’ve already developed the reporting systems to provide for the taxonomy around ESG, but of course, the systems we’ve developed and the reports we’re asking for potentially make up several hundred requests that these corporations will get. Our credit analysts are interacting with corporations around the world, and these corporations are getting the same requests from every other analyst. It’s both a practice and a technology solution: the practice will be the need to see some standardisation around what our industry is going to request. We need to collect and measure data, ensuring there’s a uniform process. Regarding the technology solutions, firms like S&P and Morningstar are already developing tools that we can use. Technology will resolve the inefficiencies around that, but it will take a little time.
Duval – We see digital as an essential tool for engaging with clients. We don’t foresee that relationship becoming 100% digital, but we are doing a lot of work in that space as we believe a hybrid model will be necessary. We also work with big banks in Italy, for example, and what we’ve seen is very interesting. Now our banking partners anticipate that Covid will be there to stay, and when they do their sales budget, they plan a share to be produced on a remote basis. And if not for Covid, something else will be there and the client relationship will be a hybrid of man and digital. For the first time ever, we see 2021 budgets done with a division of sales channelled between remote sales and purely physical, but never 100% pure remote.
Smith – As an industry, we’ve struggled to optimise that combination of reliance on technology and reliance on direct engagement at a human level and the importance of relationships. As Pascal says, if anything we’ll see an acceleration towards more of a hybrid model, both for our teams that deal with our clients, and for our investment teams in their engagements with investee companies. The same is true in the advice market. There are some really smart things happening, where some of the service providers are creating neat technology solutions to increase the accessibility of advice. This will be critical when you think about the drivers that are pushing huge pools of capital, particularly in the retirement space, to people who need and/or want advice but in a more self-directed world.
Ide – One of the inefficiencies for an asset management company has always been contact with clients, and technology is helping in that regard. We know much more about what clients are interested in when we publish writings online, and we can track to some extent how they use it, so at one level, it’s an advantage. In the institutional marketplace, there are enormous opportunities to create value directly with clients because we have direct connectivity with them. What will be a key battleground, in a way, is how we improve our service levels directly with clients, how we use AI within our portfolios and also to give clients insights and to connect with clients and to answer the sorts of questions they’re asking.
The impact of technology has been beyond enormous so far, and I think it’s going to continue to evolve very rapidly. I think that’s a challenge again for the industry, to pick where it’s going to spend its money to develop and buy in that technology, because it will rapidly change over the coming years.
Cicconetti – We are looking at blockchain to see how it can support/improve our distribution model. It’s not easy, but I understand that there is a very interesting angle that, combined with tokenisation, for example, can help us to reduce the overall transaction cost as well as offer to a wider group of clients the same solution with different features. We are still at an early stage, at least in our firm, but we are very aware of the importance of the technology, not only for fund distribution, and we feel we are well placed to capture any digital opportunity.