There’s a lot in the news about fintech, but looking at the buy-side there’s not much evidence that it’s changing the way we work. A recent Alpha study showed that only 31% of respondents had engaged with FinTech providers at all.
Asset and wealth managers often tell us that they want to be ‘fast followers’ rather than ‘first movers’ – but what does good look like and who should they be following?
Here at Alpha we have put together our ‘must haves’ of a good fintech strategy – please get in touch to hear more about how we’re helping clients.
“Start with ‘why’...”Simon Sinek
If your fintech strategy starts with a new technology – you’ve got it the wrong way around. Don’t talk about your ‘blockchain strategy’ or your ‘AI strategy’ – start instead to tell the story of ‘why’.
Maybe your ‘why’ is that you want to transform the culture of savings and retirement and improve the lives of thousands of people. If your ‘why’ is that you want to issue a press release about innovation – you’d better think again.“Culture Eats Strategy for Breakfast”…
Know what your clients need…
What is it that clients need and what will they need in the future? This should be at the forefront of every decision.
Understanding clients should not just be the job of Distribution. How can Investment products be designed to better serve your clients, what can Operations do to improve their day-to-day touchpoints and how can compliance, legal & finance be engaged in a combined effort to improve the client experience?
We’ve met too many asset managers proudly demonstrating their new client portals – followed by too many asset owners saying how annoying it is to log on to multiple systems. Know your clients – not in the KYC sense, but in the real sense. Understand how they interact with you and how they experience your organisation.
“Culture Eats Strategy for Breakfast”…Peter Drucker
Understanding the culture of an organisation is key to nurturing innovation. Does company culture facilitate innovation or suppress it? Do you generate new ideas and if so are you able deliver on them? Finally, are you more aligned with incremental changes or big releases?
Do you even have the right skills and tools for the modern workforce or do you still reply primarily on excel and email?
You need to change incentives, be they remuneration, recognition or personal satisfaction, and you need to change working styles, be they office environments, software tools or team shapes.
If your culture is just a powerpoint deck – that won’t work.
Partner with fintechs
Fintechs are not your enemy! They can be fantastic partners, sources of inspiration or even new investments.
There are many ways of accessing fintech talent – join a consortium, launch an accelerator or just meet lots of them. Don’t just encourage your leadership team to meet them – engage your entire workforce in the conversation.
Whether it’s distribution, operations, compliance, workforce, investment or enterprise – there are fintech products for all sectors.
Know your costs
With all the talk of cost pressures in the industry – there is an uncomfortable truth that many managers struggle to achieve detailed cost breakdowns. The internet retail revolution has brought about a transformation in how products are costed and priced – but there has been no such transformation in investment management – the relative margin of different investment products or different client requests is something that most managers would find hard to produce easily.
By being more rigorous about costs breakdowns, areas that are ripe for innovation will jump out.