Promising digital projects for asset management companies

Article published on Revue-banque.fr

The asset management industry is undergoing its digital transformation. Although it is a few years behind other sectors of the financial world, it is now accelerating the movement and multiplying its initiatives. All businesses are concerned, from management to distribution.

Nearly a decade after retail banks and payment service providers, asset management companies have begun to undergo an in-depth digital transformation in recent years. New technologies that enable the collection of massive amounts of data in real time (Big Data), their storage and sharing (cloud, data lake, blockchain), their analysis and interpretation (artificial intelligence, machine and deep learning, natural language processing), or the automation of processes (robotic process automation) are increasingly being used. They are gradually revolutionizing the asset management industry, from distribution to production. Like Arkéa IS, the main players in the market have taken up the subject and are actively communicating about their transformation. Digital transformation is being deployed at every link in the value chain - distribution (sales and marketing), management and investment, and operations - to meet a variety of objectives: improving the customer experience, differentiating, increasing performance and margins, reducing risk, and increasing efficiency and productivity.

An asset for distribution, from customer knowledge to reporting

 

Si l’on se penche sur la distribution, la gestion d’actifs a longtemps souffert d’une connaissance déficiente de l’identité des investisseurs finaux, du fait d’intermédiaires. Or, l’utilisation des nouvelles technologies permet aux forces commerciales et marketing de se réapproprier la connaissance client et d’analyser le comportement des investisseurs (pourquoi tel investisseur a souscrit à un fonds ou brutalement racheté ses parts ? quel est son profil type ?), et donc de renforcer l’efficacité commerciale. Parmi les initiatives de place, soulignons le succès d’IZNES, une plateforme de souscriptions/rachats de parts d’OPC lancée en 2018 par un consortium de sociétés de gestion dont fait partie Arkéa IS. IZNES assure la réception/transmission des ordres des investisseurs, ainsi que la centralisation et la tenue de registre pour les gérants d’actifs. Elle repose sur la blockchain, une technologie de stockage numérique et de transmission d’informations, transparente, décentralisée et sécurisée. Cette plateforme automatisée interopérable permet de s’affranchir d’intermédiaires, et donc de réduire les délais et les coûts, mais aussi de fournir en temps réel aux sociétés de gestion, transparence et traçabilité sur les porteurs de parts.Par ailleurs, l’exploitation des outils CRM peut être repensée avec l’intelligence artificielle pour collecter et analyser finement les données et les comportements (analyse comportementale pour fidéliser les investisseurs existants, ou prédictive pour en séduire de nouveaux) et initier des recommandations de produits adaptées et personnalisées. Les équipes commerciales disposeront alors de davantage de temps face aux clients et prospects pour construire une proposition d’investissement de valeur.En partenariat avec les RegTechs, la digitalisation peut également fournir aux sociétés de gestion une aide précieuse pour remplir les exigences réglementaires chronophages sur la connaissance client (procédures KYC, exigences MIFID). L’idée est d’aller plus loin qu’une simple collecte de données automatisée, en exploitant commercialement les informations obtenues pour mieux connaître les investisseurs, identifier les produits adaptés à leur profil et mieux répondre à leurs attentes. Il s’agit également de simplifier et réduire les échanges d’information grâce à des plateformes électroniques de marché, permettant par exemple à un client institutionnel de saisir une seule fois son dossier KYC puis de désigner les acteurs avec lesquels il souhaite le partager.

 

Finally, new technologies are revolutionizing the client experience, particularly client reporting: static monthly fund factsheets will gradually be replaced by real-time on-demand reporting, accessible via an interactive web portal. Such a solution allows each investor to generate a personalized report at any time, enabling him to display performance calculated from the date he subscribed to the fund, or to zoom in on a given geographic or sector exposure, for example. In addition, AI can automatically translate this management report into several languages and even automatically generate management comments.

Management & investment: towards an "augmented manager"

 

Portfolio management and construction teams can also take advantage of new technologies to refine and diversify investment strategies, differentiate themselves and improve performance. In addition to the traditional approach based on micro- and macro-economic data analysis, numerous alternative sources of extra-financial information can now be exploited in real time thanks to big data, artificial intelligence and numerous algorithms to obtain predictive analysis, optimize asset allocation, improve stock picking, or better anticipate risks. These can be numerical, textual or image data (for example, satellite images of the occupancy rate of shopping mall parking lots giving a "real time" estimate of consumption indicators), or exchanges on social networks around the world. These weak signals and sentiment analyses offer the possibility of identifying upstream consumption trends or opinions on a product, elements which will ultimately impact a company's results. Machine learning and natural language processing can also be used to assess certain changes in tone or detect flaws in an issuer's communication to investors, for example, and thus strengthen ESG research in terms of governance. At Arkéa IS, for example, we have been working with FinTech SFJ Technologies since its inception, which combines financial analysis, accounting expertise and Big Data in order to detect "signals" that could suggest fraud, financial manipulation or bankruptcy, which could potentially lead to significant losses on portfolio securities. These advanced technologies can also be used to correct and eliminate human cognitive biases - for example, confirmation bias, which can lead a manager to consider only information that confirms what he or she thinks and to minimize contrary information - in investment or divestment decisions. Data science and its immense potential can thus considerably increase the analytical capacities and performance of management teams. This is what we call an "augmented manager".

By François Deltour, General Manager of Arkéa Investment Services

Automated processes for operational functions

 

Finally, digitalization, accompanied by dematerialization, is profoundly transforming Middle- and Back-Office functions through increased automation of processes (robotic process automation and machine learning) as well as reconciliation tasks with custodian data. The elimination of manual tasks and paper, particularly present in the non-listed universe (real estate, private equity) will be one of the next challenges. This will result in significant productivity and quality gains, as well as reduced costs and operational risks. Teams will be able to focus on higher value-added tasks. In addition, paperlessness is part of a sustainable development approach, consistent with the ESG policies that are playing an increasingly important role in asset management, especially at Arkéa IS.

In conclusion, mastering and deploying new technologies is more than ever a strategic challenge for asset managers, enabling them to transform their distribution, production and cost models to improve efficiency and performance and to differentiate themselves. Data, at the heart of this model, plays a key role. It must be of high quality, available and secure. Although the financial investment may seem heavy at the beginning, the benefits are considerable. Digital transformation should not be seen as a threat, but rather as an opportunity; while new technologies can significantly increase the capabilities and performance of managers, salespeople and middle-officers, they will never replace them. The human being will undoubtedly remain at the center of the processes, but a human being with different skills than today. Beyond the purely technological issues, the big challenge is recruiting and retaining the talent needed for these new jobs.

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