Financial services in the “foothills of trade technology” says ALFI panellist
06 March 2018 Luxembourg
Image: Shutterstock
The last decade has seen increasing use of trading technology as electronic trading takes over from more traditional methods, but a panellist at the 2018 Association of the Luxembourg Fund Industry’s (ALFI) European Asset Management Conference in Luxembourg, says it's still early days.
According to the panellist, the financial services industry is still in the “foothills of trade technology”, with big changes coming in a few years time.
Alongside trade technology, the panel discussed a number of key challenges the industry faces and spoke of the predicted effect technology and innovation will have on asset management, asset administration and asset custody.
The panel also debated macroeconomic factors such as low interest rates, which one panellist said will get tougher due to the second Markets In Financial Instruments Directive (MiFID II), with increasing competition between active and passive funds.
Another panellist said that in asset management there is “a real challenge in the way we operate and regulatory challenge is there alongside it, we need to influence it but in the right way, products are part of that solution. We need to demonstrate value for money.”
The panel also mentioned what regulation following financial crisis had done to benefit the industry.
One panellist said that the asset management industry as a whole had become “more mature over the last 10 years [becoming] an industry of our own”, not so “comparable to banks”, following more regulations, such as MiFID II.
Another panellist said: “The end investors needs a range of suitable choice that reduces barriers and keeps cost down. The one key element we need is a different dialogue that differs from the post-financial crisis.”
The negotiations surrounding Brexit were also a major discussion point and there was, amongst many of the panellist, a concern about the UK’s exit from the European Union, in March 2019.
One panellist said: “With Brexit there’s a tendency to seal off markets and be more nationalistic, the industry needs to do a better job of educating investors.”
According to the panellist, the financial services industry is still in the “foothills of trade technology”, with big changes coming in a few years time.
Alongside trade technology, the panel discussed a number of key challenges the industry faces and spoke of the predicted effect technology and innovation will have on asset management, asset administration and asset custody.
The panel also debated macroeconomic factors such as low interest rates, which one panellist said will get tougher due to the second Markets In Financial Instruments Directive (MiFID II), with increasing competition between active and passive funds.
Another panellist said that in asset management there is “a real challenge in the way we operate and regulatory challenge is there alongside it, we need to influence it but in the right way, products are part of that solution. We need to demonstrate value for money.”
The panel also mentioned what regulation following financial crisis had done to benefit the industry.
One panellist said that the asset management industry as a whole had become “more mature over the last 10 years [becoming] an industry of our own”, not so “comparable to banks”, following more regulations, such as MiFID II.
Another panellist said: “The end investors needs a range of suitable choice that reduces barriers and keeps cost down. The one key element we need is a different dialogue that differs from the post-financial crisis.”
The negotiations surrounding Brexit were also a major discussion point and there was, amongst many of the panellist, a concern about the UK’s exit from the European Union, in March 2019.
One panellist said: “With Brexit there’s a tendency to seal off markets and be more nationalistic, the industry needs to do a better job of educating investors.”
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