On February 8th, more than 150 funds experts gathered at the Mercedes-Benz showroom in the City of Luxembourg, for the 9th edition of FundsEvent. Local and international speakers shared their expertise and discussed the latest trends which are currently reshaping the funds industry. The use of technology was notably addressed during the morning.
Investing in the new economy: robotics, automation, artificial intelligence and digital economy
Stephane Lago (Senior Thematic Investment Specialist, AXA Investment Managers) dealt with the new economy. He started: "at AXA IM, to select companies to invest in, we focus on 5 main thematics: aging & lifestyle, connected consumer, automation, CleanTech and transitioning societies. These all have one point in common: whether it is small, mid or large caps, in developed or emerging markets, they are all investable, with a potential growth of 10% year on year". He then put the emphasis on automation: "robots have been used for many years: they are flexible, cheaper and can now interact with human beings. We have seen an acceleration since 2014. It is related to demographic changes: in China, population is decreasing and the government has launched a large plan aiming at increasing the level of automation in Chinese companies: this is where the growth is". Then, Stephane Lago focused on the change in the way we consume, as online (and mobile) continues to take more and more market shares. "And it's not just a Millennial thing", he added, right before concluding: "And it is just the beginning of these multi-year thematics".
Through the morning, startups were invited to pitch their innovative concepts to the participants of FundsEvent.
First, Laurent Denayer introduced his company ume, "know your fund distributors, kyd and due diligence". "What are the problem we are trying to solve?" he asked. According to the CEO, there is an inefficient answer to respond to fund distribute due diligence requirement: fatigue from distributors, non-added value activities, iceberg view, and the difficulty of find new distributors, which can take from 6 to 9 months. "Therefore, our solution consists in a mutualized web-based platform designed to support management companies in the oversight of their network of distributors, resulting in time and cost saving, and also revenue generation" explained Laurent Denayer.
Then, David Furcajg (President & Co-founder), presented his own concept. HighWave Capital uses a Robo-Advisor that uses behavioral finance principles to enhance performance of both the end-investor’s risk assessment and asset allocation. "We created a full modular offer, from MiFIDII compliant on-boarding, to functions – aggregation and simulation – and output – allocation and reallocation" added David Furcajg. Performance is HighWave Capital's goal and a 100% behavioral robo-advisor, form end-user profiling to asset allocation, is used: "We offer a scientific assessment of risk aversion and our disruptive asset allocation approach avoids drawdowns". Customer experience is also an important part of the solution: a conversational agent is used to ease the end-user experience all along the application.
Leveraging technology to improve clients’ services in the funds industry
The event ended with a round table on the use of technology, moderated by Alexander Hoffmann (Director, AllianceBernstein), with the participation of Alexandre Pirlet (Head of Fund Administration and Distribution Solutions, BNP Paribas Securities Services) and Olivier Taille (Blockchain Officer, Market Intelligence & Regulatory Watch, Project Manager Natixis Asset Management). "Technology is everywhere. But how can it improve clients' services in the funds industry" asked the moderator, before focusing on the use of Blockchain and its benefits. According to Olivier Taille, 2018 will be the year where new blockchain-enabled plateforms will go live. "I'm not talking about PoCs anymore but rather about commercial services which will be live by the end of the year. Blockchain has two main promises: operational efficiency and client transparency. This combination will change many things in the way we handle the business of distribution" he added. Alexandre Pirlet can only agree: "Over the last years, the industry got used to the technology and increased its knowledge. Now, transparency is our main objectives through the use of the blockchain technology". The experts then compared the situation in the US – a more mature market – and in Luxembourg. "There is more pressure in our country because we HAVE TO move. On the other hand, it's a great opportunity for Luxembourg. We need to look at the American model, consider the way they approached it in order to avoid errors" explained Mr. Pirlet. According to Mr. Taille, the perspective of being able to use blockchain-enabled platforms all over Europe with all the actors means a great promise for efficiency. It will make the whole value chain simpler.
The event ended with the traditional networking cocktail, allowing experts to further discuss the rise of compliance and the use of technology in the funds industry.
Photos: Dominique Gaul
Publié le 13 février 2018