Event panel review: Preparing for disruptors
On March 31, our Co-founder and President Greg McCall sat on a nicsa strategic leadership forum panel entitled “Preparing for Disruptors” about how new technology solutions are helping asset managers innovate and navigate the modern environment. It was an all-star cast, including Sumedh Mehta, CIO, Putnam Investments, Matt Glickman, Global Head of Financial Services, Snowflake, and Phil Andriyevsky, Partner, EY, and each brought with them different perspectives resulting in a dynamic, holistic view of the main theme. The financial services industry is embracing technology to enable and exceed business goals.
Some of the discussion is outlined below. Also watch the video if you have time; it’s a great conversation.
Asset managers are embracing technological advances at a rapid pace.
The unprecedented, worldwide shift in 2020 compelled everyone to band together and essentially redesign their firms’ business operating model, in most cases accelerating their digital transformation. The pace was the most surprising piece as institutional investors are now looking first to leading technology providers, and last to building it themselves, in efforts to focus on their own core value proposition. Technologists at fund managers are looking at business evolution—to align with their goals and deliver the technology behind it.
“Bringing in the right technology that comes at the intersection of business change is where we find fintech to be really valuable.”
– Sumedh Mehta, CIO, Putnam Investments
Financial technologies are enabling and empowering organizations to improve overall front-to-back-office performance.
Change has come from both directions, top-down and bottom-up, as institutional investors seek to scale. Technology providers, such as Snowflake and EDS, are democratizing and demystifying access to data science making it usable, accessible, valuable, cost effective and easy to deploy. This combination has led to large top-down firms, such as Northern Trust, State Street, and others to invest in the front office space. The connectivity created from integrating front-, middle- and back-office solutions allows for increased collaboration, better regulatory compliance, cleaner reporting and quicker access to data.
These technologies are secure, cost-effective and can be delivered and configured rapidly to meet the bespoke needs of each manager.
Gone are the days where you need to wait more than a year to deploy a ready-to-use system. The configurability of newer software, such as from Snowflake and EDS, has made the idea more enticing, thereby leading to increased adoption. Especially when combined with secure and high-performance data access, cloud-enabled solutions are increasingly the first solution to be considered. Adopting new technology doesn’t always mean investment teams need to change their ways. So much time, effort, and dollars likely spent to build complex, often Excel-based models and workflows, that these newer, best-in-class ecosystems can provide a low-friction way to help teams run smarter and utilize their data more efficiently.
Chief Information Officers are becoming “alpha generators”, as they deploy modern and advanced technologies to enhance investment processes.
In accelerating the digital transformation process and adoption of best-in-class solutions, the responsibilities of leading CTOs, CIOs and IT departments are evolving as well. Traditionally seen as primarily responsible for efficiency in the middle and back office, they are increasingly influencing the front office, generating what has been called “operational alpha”. When there is stability in the solutions and are working as prescribed, they are now looking at all the innovative technologies that can evolve and help their business partners get to their goals faster, setting new heights for these roles.
“This differentiation of focusing on where you bring value and then leveraging your partners for the other pieces is really game changing.”
– Matthew Glickman, VP, Customer Product Strategy, Global Head of Financial Services, Snowflake
If these past few years have taught us anything, it’s that digital transformation, no matter the varying levels, is necessary. The world is evolving and embracing technological efficiencies, and financial services is not immune to this unprecedented change. Luckily, there are apps for that.