The issue of legacy technology continues to be a significant pressure point for the industry, agreed panelists discussing digital transformation at this year’s Association of the Luxembourg Fund Industry (ALFI) Global Distribution Conference.
The panel, entitled “How can evolving digital transformation enable retail investors' cost-effective access to investment solutions?”, highlighted that providing a digital platform that can adapt to local legislations and combine new product features is a goal that the industry should be working towards.
Connecting new technology to legacy systems, many of which are up to 20 years’ old, breaks the digitisation of systems. The ecosystem must be interoperable and encompass many technologies, the group added.
Simplifying asset management and making it more accessible is essential, as is educating and interesting young investors, who are more likely to lean towards crypto markets, said Emanuelle Pecenicic, head of digital propositions and partnerships at APACxJ Fidelity. She also suggested the funds industry should follow crypto’s lead — using social media, the metaverse, and a focus on community to market to the younger generation.
Olivier Portenseigne, CEO of FundsDLT, agreed, and emphasised the importance of making the process easier for ‘digitally-native’ audiences of both asset and wealth managers.
Developing direct-to-client (D2C) products removes distributors from the process, something that Portenseigne sees as a benefit. Questioning whether they are effective in their roles, he argued that their absence will allow asset managers to better understand their customers. However, he also mentioned that due to some asset managers’ lack of brand image, they may wish to keep B2B2C distribution strategies.
Charles Sayac, head of sales for wealth and distribution at Amundi Technology, added that many asset managers are working alongside distributors to create new solutions for retail investors.
Sayac also reframed Pecenicic’s vision of ‘cannibalisation’ as creating a new distribution channel, complementing rather than superseding existing structures. Challenges around implementing such a service were also discussed.
Closing the panel, the three concluded that now is the moment to go digital, emphasising the increased transparency and potential for personalisation that digital transformations offer.
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