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Roundtables & Panels

Technology Roundtable: Does asset management need full automation?

FUNDS EUROPE: Does the industry need to be more militant about the difference between automation and STP, as well as pointing out the flaws of partial automation?

WEBBER: You have to look at the process itself and the reason why you would want to automate it. There are elements of processing where it makes no difference if a human being is in the middle of the process, such as order routing or settlement. All those human beings are doing is potentially creating errors. However, there are other processes which are more sensitive, for example, processing an investor's death. Here we end up with extremely vulnerable people at extremely vulnerable times in their life, and just sending something into a system in a really unempathetic way is not appropriate.

automation, tech

We will also find that when some people choose to invest, they'll be quite happy to do a lot of research upfront, but at some point, they may wish for that human connection just to go through what they've done and make sure it makes sense.

GLYN: If you look at all the different super apps or services that we use online, the majority of the time, we're very happy for that entire process to be automated. But when something goes wrong, you really want to chat with a human being. That human capital side of things is where a lot of firms can really differentiate themselves from their competitors.

BONTE: This is the challenge when it comes to self-service. If you are using your apps today, you are doing a lot of things that were done by other people on the service side. But we still need to think about where we want to put human connection to make sure that we are bringing added value. Automation will reduce errors but will also reduce the quality of some services for clients, so there is a trade-off to be managed.

FUNDS EUROPE: The Funds Europe Global Automation Survey showed that client service is a big driver for increased automation. Is this a move away from what were previously the traditional drivers of automation, which were cost reduction and risk reduction?

GLYN: You need both. If you look at Amazon, why they did well at the beginning is they were a supply chain, they were a fulfilment shop, so you need to be ruthlessly efficient in every part of the supply chain process in order for your business to be effective, and that still absolutely applies to whatever business you're in, whether that's consumer goods, factories, or whether that's being a custodian.

Only once you've got that right can you provide great client service at the front end. In an environment now of competition and basis point compression, everybody's looking for cost savings wherever possible.

BONTE: Automation should reduce cost and risk, and moving from fax to email is not changing so much, because we still have a risk of error with email. We need to increase not only automation but enable more digitalisation. We need to be able to provide services at any time for our clients so they can access their information and perform transactions. It is about the flexibility that is provided through digital transformation and client interaction.

"We need to discuss this with our clients so they can understand how these transformations are in their interest."

WEBBER: We must remember that many of our clients' service activities aren't necessarily aimed at retail clients but at institutional clients, and so in today's world, we don't necessarily need the institutional clients to use an array of portals that we decide to introduce.

The creation of APIs and data solutions such as Snowflake will, in the long run, enable us to create mechanisms of pushing that data into our client systems directly and therefore, automation isn't just achieved within the context of the asset servicer but also within the context of the pension fund or the asset manager themselves who can access the data they require from the systems that they use on a daily basis. That's where you'll start to create higher levels of automation across the industry that will enable investors to access information really easily.

BONTE: It's not only portals, it's also open platforms. Typically we can provide services through different channels – fax, email and now APIs. We need to discuss this with our clients so they can understand how these transformations are in their interest. This is because there is a cost involved. Generally, the products that are on the market are not so open, so we need to make the investment that will move us on to the next level. It's quite important that we can provide different sorts of connections so the client can undergo a cost/benefit analysis and manage their costs and the risks that come with automation and digital transformation. It's really a platform concept.