InvestOps Europe 2020

16 - 18 September, 2020

Business Design Centre | London

+44 (0) 207 368 9465

InvestOps 2019 Day One Panel Highlights

9:00 - Buy Side COO Keynote: Creating a culture for innovation - How to build a best-in-class operations division that eliminates silos and drives the required changes within your business. 

  • Three key learnings: the importance of an open ecosystem, relentlessly driving value creation and innovation is hard work.

  • We’re all experimenting with innovation labs, but throwing money into an innovation lab and it not going anywhere does not add value. Don’t confuse movement with progress.

  • The challenge of the mastery of technology is not a technology challenge, it is a people and a cultural challenge. By being open in your ecosystem approach, have people thinking that they are adding to the bottom line of an asset management company empowers them.

  • The responsibility of us in this room is that people feel empowered. Create the circumstance that people can do their job.

9:20 - COO Keynote Panel: Assessing the top 3 transformational trends shaping investment operations - How are the leading European buy side firms adapting now to thrive in a technology driven landscape?

  • The latest push in investment operations is achieving digital alpha. As firms continue to drive down the digitalisation path, it it becoming vital for operations and technology teams to work together. This involves a constant review of the technology platform and streamlining it so there is no duplication of data and inefficiencies. Technology also provides an empowerment opportunity, allow people to get closer to the technology, and work more agile with the innovation departments in order to become experts in a particular system.

  • Operations teams are being challenged to managed complex investment products alongside traditional equity, fixed income, multi-asset portfolios. The requirements to support these complex products is very specialised, and the only way to manage these is to have data at the centre. This means bringing all the data together and ensuring you get the right data to the right people.

  • A key part of the operating model is outsourcing, but regulations have made it clear that buy-side firms are responsible for the underlying service, regardless if it is outsourced to a third-party. Operations teams need to ensure they are capable of stepping in when a service fails.

  • Buy-side firms are in favour of working with a smaller number of vendors, both big and small-sized, and having deeper relationships with their partners. However the expectations of monitoring and governing these relationships is very challenging.

  • Risk management data is becoming essential, but there is still a gap in communicating that information to the portfolio managers. You need to make sure the risk management information is put together in way that can be translated by the front-office and give value to their investment portfolios.

10:00 - Fireside Chat: Transforming operational business models - In the backdrop of fee pressures, passive investments and increasing demands for transparency, how can you adapt to generate increased alpha and grow your AUM?

  • It’s all about data and understanding what’s going on and that is key to driving transformation.

  • You need to understand the problems have clear objectives about what you are trying to do. Any kind of transformation starts with talking to people and asking what the problems are, and then it’s having the data – what’s going on and what do we need to change?

  • Failing fast means I need to know objectively what I’m doing is working or not, and with the right data you can see that.

  • When it comes to technology, it is again about asking what do I need to solve and what is the best approach - there are some scenarios where machine learning might be better, but others where you can just write a set of rules without taking that risk of using the technology.

  • So how is technology solving this problem and why is it better than the alternative because there’s always an alternative. A lot of blockchain projects are going nowhere because people just wanted to do something with blockchain.

  • While I’ve talked a lot about data, you also shouldn’t neglect the views of people that have been doing the job for a long time.

11.00 - BREXIT KEYNOTE: Preparing for no-deal - The future of EU/UK Financial Regulation and how you can future-proof your business beyond October 31st.

  • The industry has many hurdles to clear due to Brexit, including CCP equivalence, the application of the shared trading obligation (STO) amid the potential for further fragmented markets, as well as data sharing among UK and EU authorities. The STO has been particularly challenging, and questions remain about whether authorities in the UK and the EU will grant equivalence to trading venues. The recent experience in June where the EU decided not to extend equivalence was likely a short-term, political move to shift liquidity into EU jurisdiction, regardless of the cost to market users.

  • The UK will maintain the EU rulebook for a considerable period of time post-Brexit, as UK politicians were fully behind most large pieces of regulation that have been implemented over the past decade, including MiFID II and EMIR. Both regulations have been onshored in the UK in full, meaning that in theory, firms should see little change in this area.

  • The UK will leave the EU, but Swinburne remains positive that there will be a negotiated and orderly departure, regardless of the political outcome. Market participants are best placed to ‘weather the Brexit storm’ as many operators are global in nature. Firms will find a way to provide suitable access to markets on behalf of clients. The UK and the EU will remain open for business moving forward, but those regions placing unnecessary measures to complicate this will not thrive in the long-term.

11.20 - Fireside Chat: Gaining an enterprise-wide view of your data– How can you implement a data management strategy that increases transparency across the business and aids accurate decision-making?

  • A core component of data management strategy is taking it back to basics. This means focusing on best practices around data regardless if it is in a data lake or a warehouse, understanding the data flows, and knowing the roles and responsibilities of those that are using the golden source of data.

  • To aid accurate decision making, you have to take a step back and look at the data architecture on an ongoing basis, especially when consolidating multiple sources of data into one.

  • There is a cultural behaviour change involved in data management. If this is absent, you revert back to bad practices and impacts good decision making.

  • The challenge is to build a business case around the data that can influence decision makers throughout the organisation. It is a hearts and minds battle, and requires either a chief data officer or chief technology architect to hammer home the importance of data when investment decisions are being made.

  • Machine learning and robotics processing automation (RPA) could offer huge opportunities as a complimentary technology that can serve as a supporting solution to decision making and gain insights that you did not previously have access to.

12.00 - All Star Panel: Striking the balance between the human and digital - How can you balance headcount and technology to run an efficient streamlined investment operations division?

  • Operations teams can’t be fully technology-led, there needs to be a business driver and an overall business strategy that the ops team fit into.

  • People within the operations divisions are absolutely changing, the operational specialist is a dying breed. One panellist said if you look at his team there are more business analysts and process engineers.

  • Asset managers tend to not hire too many operations specialists these days, they look more for generalists who can lend their hand well to taking a process and condensing it down.

  • When it comes to ‘what to automate?’ one panellist said his firm starts with a risk-based approach to manual tasks. What’s the risk appetite of the firm around those tasks? Do they lend themselves to material error where you have to explain to clients? Once those questions are answered, then they would try to get tech buy-in, support from the board to distribute the relevant resource.

  • Uncleared margin rules out there at the moment are a good example of an area where you can automate, and if firms aren’t prepared for that then that will bite you in terms of manual tasks.

  • Machine learning is further down the road, and there’s much more low-hanging fruit to address for now.

  • Regarding roles that won’t be around in the future, one panellist referred to the data warehouse people. Data warehouse has become a commodity so in-house data warehouse teams will not be there in 10 years.

17.10 - Future of Work: Institutionalising LEAN transformation and an agile culture in your organization to achieve operational excellence

  • The future is in disrupting your business models and thinking in a new way

  • Businesses have to be fast, nimble and adaptive in the future. Allow employees to innovate, to succeed in creating value and be rewarded accordingly.

  • Asset managers tend to not hire too many operations specialists these days, they look more for generalists who can lend their hand well to taking a process and condensing it down.

  • One day we will be able to move from one side of the world to another in a matter of seconds through augmented and virtual reality.

  • Offices as we know them today will cease today as more and more people begin to work remotely.

  • Introduction of humanoid robots – the fusion of man and machine. Over a period of time you will see a mix in our workforce as these robots make up part of the workforce of the future.

  • In the future there will be a rise of ‘the unbankables’ as innovation will happen with these individuals because innovation happens at this end of the market and moves up, disrupting the entire industry.

  • Companies will have to work out how to connect with a new generation that is so familiar with technology.

  • In the future there will be a rise of ‘the unbankables’ as innovation will happen with these individuals because innovation happens at this end of the market and moves up, disrupting the entire industry.

  • There will be a rise of Smart Governments using blockchain, artificial intelligence and new technologies. Organisations will have to learn how to tap into these smart governments in the future in order to innovate.

  • Alternative data forms arising – such as monitoring facial expressions or time taken to fill in a form when deciding whether they are likely to default on a loan. It’s important people are using data to make decisions.

  • Every business should hire a chief ethics officer – something essential to survive in the future.