Facing pressure to prove value, fund managers increasingly turn to digitisation for efficiency and cost reduction. As digital sophistication correlates with performance, has the industry caught up with banking’s advancements in recent years? That was the topic panellists explored in the first post-lunch panel at the FundsTech Forum panel held in London today delved into the world of digital transformation.
The panel was comprised of Edouard Legrand, chief digital and data officer at BNP Paribas Asset Management; Martyn Cuff of Cuff Consulting, a former regional COO & global head at Allianz Global Investors and Pascal Stegmann, digital architect at ARK Investment Management. The discussion was moderated by Nick Fitzpatrick, editor, Funds Europe.
Digital transformation can have various meanings, but what does crystalising the topic in the context of investment funds management mean? According to Cuff: “Transformation is an abused word – you can use digital to do things better or do better things. The goal should be doing new things not doing things.”
Legrand shared that the way BNP Paribas Asset Management view it, digital transformation is a journey – a continuous process with a focus on the long run.
Stegmann emphasised that discussions on digital transformation should encompass the entire value chain. Drawing from his firm’s U.S. experience launching a venture strategy for retail investors, he highlighted the collaboration with a fintech firm to democratise the process.
The moderator posited that the last great innovation in the funds industry was more than 25 years ago with the invention of the ETF. Does that imply the funds industry is not good at transformation?
Acknowledging that transformation has indeed occurred, Cuff argued: “There is no reason we shouldn’t do more.” Citing recent research, he also pointed out that only one-third of chief information officers and chief technology officers had technology associated with their titles – about two-thirds did not have any technology-focused representative at the top table.
According to Stegmann: “The highest value people are the translators – one can’t expect everyone on the frontline to be a techie.”
Regardless of industry, embracing technology is pivotal, emphasised Cuff. Old industries must be renewed and new ones created. “Over the next decade, democratising access to private markets would be fantastic progress. The key is how to protect investor money by leveraging tech.”
Additionally, Legrand speculated that the digital transformation landscape over the next decade would involve investing in technologists and funding long-term investment, with restructuring leadership being a challenge to resolve.
Opining that consumers are indifferent to how backend operations function, Stegmann concluded: “The objective is to bridge the gap between current infrastructure and futuristic technology.”
