Funds Europe talks to Amundi Technology’s Matthieu Keip about Le Lab and its goal to put innovation at the heart of the firm’s activity.
In March this year, the French asset manager launched Amundi Technology, a business line dedicated to position Amundi as a technology solutions provider for the asset management and savings industries.
Amundi Technology provides an ‘a la carte’ suite of products, including portfolio management system, wealth and distribution tools, employee savings and retirement platform, and specialized solutions. The products are based on ALTO*, an internally developed software, based on an open source model and Amundi’s own private cloud.
At the heart of Amundi Technology is its own innovation centre – “Le Lab”. Throughout this article Matthieu Keip, innovation lead at Amundi Technology, shared with us his thoughts About how Amundi Technology is staying ahead of innovation through “Le Lab” and how the latter represents Amundi’s strategy to put innovation at the centre of its activity.
“Le Lab”: Amundi Technology’s innovation spearhead
“Le Lab” is designed to accelerate Amundi Technology’s innovation projects, support its clients’ activities, help smoothly adopt new technology, and also leverage inclusion of third party fintechs and innovation.
“Le Lab”, actually, predates Amundi Technology. It has been going for four years during which time it has grown its staff and expanded its scope. Innovation is in Amundi’s DNA and there is a strong culture of development within the company. The March launch of Amundi Technology has strengthened the position of “Le Lab” to promote the innovation as a key differentiator to the service of our clients.
“Le Lab” employs many of the strategies and principles that have become common in software development, such as the use of open source software, agile development and the adoption of new technologies like artificial intelligence (AI) and natural language processing (NLP).
Behind “Le Lab” are more than 15 former portfolio managers, traders, and technology experts with a deep understanding of the market and the technology, who are working today on both the innovation and the market screening sides. They are providing valuable insights from “the battlefield” and making sure they materialize effective use cases.
The projects under development in “Le Lab” include the use of AI for net asset value (NAV) validation, the use of natural language processing for analysing financial information and helping with alpha generation.
“Le Lab”, a real world sand box?
There are three main components to “Le Lab” – an incubation unit designed to help develop internal projects within the group as well as external startups; a prospecting division to examine future industry trends and propose new products and services; and an educational arm to help ALTO* users develop their own coding and software development skills:
- The ‘incubation’ arm has a dual role within “Le Lab”. It not only incubates internal projects but also serves as a sandbox for new technology. Almost 99% of the production comes through ALTO*, Amundi’s core portfolio management system. “We provide a platform and data sets to allow people to test their prototypes in a secure and safe environment, rather than using an external cloud for development.”
- The ‘prospecting’ part of Le Lab is about foresight and developing a future-proofing approach to asset management by identifying the next big trends likely to influence the asset management market. It also strengthens Amundi Technology’s links with fintechs and academia, including the leading universities in France as well as the US, such as Massachusetts Institute of Technology.
- Coding and new developments are encouraged within the Amundi ecosystem. “’Le Lab’ enables collaborators to rapidly test new ideas in a safe ‘test and learn’ mode and to share knowledge and ideas across various teams from both the business and technology sides of the company.”
The above-mentioned parts rely on each other and enable value creation in a transversal way.
“Le Lab” use case: technology reshaping sustainability
“The most difficult part of innovation is not coming up with ideas but managing the current ideas and turning them into real implemented projects that can be used within Amundi but also rolled out to other asset managers and third parties,”
A good example of turning ideas into fully-fledged products is a use case based on ESG news analysis. “We have partnered with a US fintech on the development of a product that analyses millions of ESG-related documents in 27 languages.”
Using source material that includes mainstream newspapers like the Financial Times as well as local newsletters, the product identifies arguments and quantifies ESG-related links with real assets and companies. “We examine, analyse, and extract causal relation from raw data and create a forecast on financial and non-financial KPIs. It is an alternative scoring product to traditional ESG methodology.”
For example, in February, the tool detected an article about a contract between a chipset manufacturer and a water tank supplier. 7 days later, an article about a drought in Taiwan was published.
The causal link between the water shortage and the drop in chipset production made it possible to immediately anticipate the negative impacts on the revenue of the automotive sector, as chipset production needs large amount of water. The real difficulty in this sector was effectively taken into account by the market 3 months after the detection by our solution.
The tool is dealing with unstructured data rather than the various ESG ratings information. “There are more than 4,000 synonyms and concepts behind it and we constantly add new ones to the technology.”
The tool is also avoiding the huge energy consuming computational power that comes from deep learning. “We have focused more on augmented intelligence and using symbolic A.I. and Bayesian approach rather than neural networks. It is not designed to replace people but help them to add more value to their role.”
Among additional use cases which have emerged from “Le Lab” include one focused on automating and analysing the transcription of telephone calls and trading chatroom conversations for fraud detection purposes. Regulatory scrutiny of employee communications has increased of late and the solution is designed to streamline the compliance process for firms.
In terms of future focus, “Le Lab” is aiming to increase its links with third parties and to work not just with fintechs but also other asset managers. Le Lab is also looking to be more global in its outlook with a greater focus on emerging markets.
Disclaimer: The information contained in this document is deemed accurate as at 30 September 2021. Data, opinions and estimates may be changed without notice. Document issued by Amundi Asset Management, a French “société par actions simplifiée”- SAS with capital of 1 086 262 605 euros - Portfolio Management Company approved by the AMF under number GP 04000036 — Registered office: 90 boulevard Pasteur — 75015 Paris — France — 437 574 452 RCS Paris - www.amundi.com.