Digital & Fintech
What have been the key projects your Forum have been working on since its creation in January 2016?
When creating the forum in early 2016 we decided to invite non-Alfi members to participate from the start. This enabled us to create strong links between the industry’s incumbent players and startups, Fintechs and companies from the ICT industry. Based on the strong interest showed by members and non members we quickly decided to setup four dedicated working groups. The various groups have focused on the following topics during the past year:
• Digital Investing: the impact of robo advice and other direct to consumer distribution channels on the asset management industry.
• Data Management and Security: analysis of available KYC outsourcing solutions and options for achieving shared KYC services across our industry.
• Blockchain and Crypto Currencies: active contribution to industry initiatives involving the use of blockchain technologies for fund distribution and transfer agency. Assessment of crypto currencies as a new asset class.
• Peer to Peer Lending and Equity Crowd Funding: review of existing European regulations and assessment of regulatory hurdles and needs at a pan-European level.
How does fintech facilitate fund distribution? Is the industry ready for these changes?
Fintech solutions in areas such as digital identity, video KYC, distributed ledgers for record keeping and e-wallets will accelerate the development of direct to consumer distribution. Furthermore the second payment service directive (PSDII) and the emergence of account aggregators and other service providers in the payments space are also believed to have a strong impact on the way funds will be distributed in the near future.
Finally, recent developments in institutional distribution such as market place platforms connecting asset managers and institutional investors also show the potential impact of digitalization in wholesale distribution.
The asset management industry is definitely gearing up in order to adjust to these changes. The Alfi digital Forum offers a unique platform for the fund industry to interact with Fintechs and innovators relevant to our industry.
What « disruptive» impact might FinTech solutions have on existing operating models ? What kind of impact on employment do you expect as a result of implementing FinTech solutions?
Innovations such as industry wide KYC shared services or the use of blockchain for maintaining shareholder records will probably have a profound impact on existing organizations and teams. Many asset managers and service providers have started to realize this and have decided to take an active role in this change process.
Digitalisation should enable our industry to become more efficient and to eventually create more value for investors. The future of employment will probably lie in the provision of more added value services and enhanced client experience.
Serge Weyland (Banque Internationale à Luxembourg S.A.) and Steven Libby (PricewaterhouseCoopers Société coopérative)
Co-chairs of the ALFI Digital/Fintech Forum