FundForum: Shifting investor expectations
12 June 2018 Berlin
Image: Shutterstock
Investor expectations are fundamentally shifting, said a speaker at this year’s FundForum conference in Berlin.
The panellist argued that the second Markets in Financial Instruments Directive (MiFiD II) is the “most fundamental regulatory change in its existence. Asset managers are in the spotlight and the expectations of the level that they operate on is much higher”.
The panel discussed how COO’s deal with the implementing transformation across single and multiple technologies and businesses. They also discussed the best practices in dealing with the responsibility and oversight of implementing transformation to enable future growth and agility.
Some of the main challenges revolve around digital, with one panellist arguing that the
industry is still grappling with the challenges around it.
“They are trying to work out how to interface with the customer in a heavily regulated environment”, the panellist added.
Another panellist saw challenges being mainly cultural, arguing that delivering transformation is a difficult and complex task, “cultural change is an extremely difficult challenge to overcome", the panellist said.
Meanwhile, another panellist added: "Operating models have grown over many years. Linkages and glues between them have been the weak point for many asset management organisations."
Advising on the best ways to implement transformation, one member of the panel suggested having a clear strategic plan, they commented: “Clarity of focus is very important. Addressing the cultural changes is paramount. Tone has to be set at the top and there has to be a very clear vision and a very clear voice, as well as thinking about the different types of skills that are required.”
Agreeing on this point, another speaker advised: “Communicate clearly the strategy that is shaping the transactions. Put data at the heart of your transformation activity."
However, one panellist warned: "If you are doing a transformation you have to be willing to face full consequences. The biggest transformation going forth will be a people transformation - business pooling technology."
On a positive note, one speaker pointed out that it is a great learning curve, the speaker said: "Creating that change for the value of learning from it."
"Having a very clear vision as to what the operational strategy is and having a very clear set of services and capabilities is key, and that needs to be underpinned by talent. Where do we want to be in five to 10 years time? Looking to source services that we can't ultimately provide for ourselves."
One member of the audience asked the panel: “Are you looking to solve your problems in non-traditional ways? Are you more willing to use more financial technology companies added in?”
To this question, one speaker replied: "Lots of investment has to go into existing capabilities.
We are increasingly seeing need to disrupt and change the nature of our traditional services."
Another audience member asked: “What does a world class COO look like in five to 10 years?”
"The role of COO in asset management industry has shifted to understanding who are our clients are and what they expect from us. Indeed, there has already been a quantum shift. There will be a lot more around the ability to build relationships”, one panellist replied.
“COO's in future will be more tech savvy but also relationship centric. I think that they will understand the client more fully and they will have more interest in what goes on in the front office and how those outcomes are generated. I think ultimately they will become sales people."
One speaker concluded: "We [the industry] need to combine the old with the new. For example, in wealth management there is fantastic amount of fintech happening. However, we still need old skills. Having that personal agility and that narrative is going to be very important to the future."
The panellist argued that the second Markets in Financial Instruments Directive (MiFiD II) is the “most fundamental regulatory change in its existence. Asset managers are in the spotlight and the expectations of the level that they operate on is much higher”.
The panel discussed how COO’s deal with the implementing transformation across single and multiple technologies and businesses. They also discussed the best practices in dealing with the responsibility and oversight of implementing transformation to enable future growth and agility.
Some of the main challenges revolve around digital, with one panellist arguing that the
industry is still grappling with the challenges around it.
“They are trying to work out how to interface with the customer in a heavily regulated environment”, the panellist added.
Another panellist saw challenges being mainly cultural, arguing that delivering transformation is a difficult and complex task, “cultural change is an extremely difficult challenge to overcome", the panellist said.
Meanwhile, another panellist added: "Operating models have grown over many years. Linkages and glues between them have been the weak point for many asset management organisations."
Advising on the best ways to implement transformation, one member of the panel suggested having a clear strategic plan, they commented: “Clarity of focus is very important. Addressing the cultural changes is paramount. Tone has to be set at the top and there has to be a very clear vision and a very clear voice, as well as thinking about the different types of skills that are required.”
Agreeing on this point, another speaker advised: “Communicate clearly the strategy that is shaping the transactions. Put data at the heart of your transformation activity."
However, one panellist warned: "If you are doing a transformation you have to be willing to face full consequences. The biggest transformation going forth will be a people transformation - business pooling technology."
On a positive note, one speaker pointed out that it is a great learning curve, the speaker said: "Creating that change for the value of learning from it."
"Having a very clear vision as to what the operational strategy is and having a very clear set of services and capabilities is key, and that needs to be underpinned by talent. Where do we want to be in five to 10 years time? Looking to source services that we can't ultimately provide for ourselves."
One member of the audience asked the panel: “Are you looking to solve your problems in non-traditional ways? Are you more willing to use more financial technology companies added in?”
To this question, one speaker replied: "Lots of investment has to go into existing capabilities.
We are increasingly seeing need to disrupt and change the nature of our traditional services."
Another audience member asked: “What does a world class COO look like in five to 10 years?”
"The role of COO in asset management industry has shifted to understanding who are our clients are and what they expect from us. Indeed, there has already been a quantum shift. There will be a lot more around the ability to build relationships”, one panellist replied.
“COO's in future will be more tech savvy but also relationship centric. I think that they will understand the client more fully and they will have more interest in what goes on in the front office and how those outcomes are generated. I think ultimately they will become sales people."
One speaker concluded: "We [the industry] need to combine the old with the new. For example, in wealth management there is fantastic amount of fintech happening. However, we still need old skills. Having that personal agility and that narrative is going to be very important to the future."
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