16 - 18 September, 2020
Business Design Centre | London
+44 (0) 207 368 9465
9:00 - Opening Keynote Interview: Overcoming operational efficiency challenges - What are the top 3 critical success factors for building a streamlined, cost-efficient investment operations division in 2020?
- In 2020, operations will be the battleground in the search for alpha, not the front-office, and the next decade will be one where operations becomes ‘sexy’.
- The make-up of investment operations teams, will see “less ditch diggers and more cathedral builders” as there are less specialists and more people working end-to-end.
- BlackRock speaker says “If we’re not end-to-end in the way we think we’re stuck” as he looks to bring people from trading into ops, and vice-versa to have a team with multiple subject matter expertise.
- Continuing a common thread from this event, both speakers say the make-up of the team is also including a lot more technologists and developers working alongside those in the business functions.
- Both speakers say they don’t look at anything we do in investment operations as proprietary.
- As fees are going down the markets we are in are more complex. Beginning to do a lot more with less folks, in more regions, with less scale. Cost pressures to do more with less, regulatory pressures are never ending.
- Interesting angle on investing in innovation – Vanguard are looking at giving different functions a budget to see what they can come up with, as an alternative to funding per project.
9:20 - All Star Panel: Spending smart instead of spending big - How can you overcome legacy architecture and integrate agile, future-proof technology to maximise front-to-back efficiency?
- What asset managers are trying to build are operations that are as scalable as possible. The areas to invest are the ones where we are not scalable.
- Everyone within the chain needs to be moving at the same pace in order to introduce new technology stacks and you need to be clear about the operating model you have in different instruments.
- Operations teams are trying to change the relationship between the back/middle and front office. It used to be that whatever the front wanted they get, the more you dig into that you see the issues it causes in the organisation.
- The more you can reverse the relationship and have ops teams lead the framework in which the front-office can operate smoothly is very efficient.
- You don’t want to trade one instrument twice and throw away months of setup. People spend time working with colleagues and investments on projects to deliver new things for them, and the role is listen and work with business analysts, suppliers tech providers to figure out what’s the optimum solution.
- With M&As, the key thing is about everyone working on the same set of data. When you go through mergers you mix data that should say the same thing. The main thing is to work on reference data.
- On experience from the Aberdeen and Standard Life merger - The good thing was that both organisations had identified that everything was about data and had embarked on data programmes. We benefited from the fact we’d been through that exercise once already.
- Aberdeen Standard Life “more outsourced than we’ve ever been before”.
9:40 - Special Guest Speaker: Future-proof yourself - How are RPA, AI and ML going to radically change and shape the future of your profession?
- What can you do next year that you can’t do this year? There’s not one exponential technology to deal with, there’s multiple. Are you moving to the cloud? Are you using AI, RPAs, augented reality, blockchain, quantum computing? 30 years ago, it was just infrastructure and systems but now it’s hard to keep up. Challenge just trying to keep up.
- Hundreds of emerging technologies, each tech can transform one industry or many. You should think about technology combinations, because when you combine them you get the future of food production, agriculture, government, smart phones etc.
- Technologies enabling gene replacement, holograms, mind-reading – one day you’ll be able to live-stream your thoughts to YouTube.
- Everything is speeding up – so if people say they have a 10-year plan, it’s actually a 7-year plan, as everything is accelerating.
- If everything is getting faster – could you see a multi-billion dollar business set up in a day.
- There are potential downsides on reliance on tech.
10:20 - Regulatory Keynote Panel: Which new regulatory changes are expected to shape Buy Side Investment Operations in the year ahead and how can you best prepare for them now
- One panelist explained they have got over the hump of MiFID II transaction reporting and is now comfortable with handling the flow of information. However, a key challenge now is to make sure that any changes to the business model is accurately reflected in the reporting.
- SFTR is looming large for many asset managers that will have to report from next year. Some will have to be careful about their counterparties that would need information from them in order to report themselves in April. The speaker from State Street Global Advisors said because their banking parent, State Street, is required to report from April, they have had to bring forward their readiness.
- Patrick Pearson from the European Commission explained that it is on track with reviewing the existing reporting framework, with the aim to map out how data is reported to regulators, what areas of reporting can be scrapped, and is there any potential to streamline parts of the regulatory reporting process.
- However, Pearson said the difficulty in this is the national regulators all have a different perspective on what should be scrapped. The Commission intends to have a serious discussion about how regulators can come to an agreement.
- The Commission is also faced with dilemna of whether they should regulate innovation
- With the next Commission and new European Parliament, there is a sentiment that MiFID II will reviewed, including areas around client reporting. A concern for one asset manager panelist is that while the intent is good, it may lead to additional elements of reporting that could bring additional costs on to them. With the prospect of new reporting reporting fields, the panelist said he would prefer to live with the existing regime.
11:30 - Fireside Chat: The future is now - How can you clear and settle trades on current Blockchain infrastructure and what does the future hold for this technology?
- Since the early quarter of 2017, there have been elements of fatigue from the sell-side because of number of DLT proof-of-concepts that hit the market and the challenges around decentralisation. Over this period, financial institutions have become oblivious to what has happened in public blockchain, in which ethereum has enabled the growth of tokenisation of physical and securities assets.
- It will be likely that you will have a digital custodian that will safe keep tokens or keys, and provide services to transfer underlying assets. But the current DLT ecosystems need to have interoperability with existing market infrastructures and clearers to create that critical mass.
- The majority of asset managers have taken a wait and see approach, and will only join the party once the sell-side and technology vendors have developed amicable solutions. DLT is forcing the sell-side to reinvent themselves at a time where they are increasingly cost-strained, however, asset managers are looking to eliminate as many intermediaries as possible. If they do not increase their activity in the DLT space, they may end up with architecture that does not suite them.
11:50 - 360 Perspective: New horizons in alternatives - How can you automate manual processes and digitize your operations for complex assets and instruments to enhance the client experience?
- The alternatives market is no longer seen as a niche market, it is much more mainstream as assets under management have grown to $9.8 trillion. However, this growth has led to a scale issue. It is a balancing act of being both a specialist and having scale.
- The alternatives market is facing the same digital journey as the asset management industry. The core components to this journey is investigating and capturing a clear understanding of the current state of operations; organise and develop the infrastructure to scale; integrate and focus on enhancements to the client experience; and integrate intelligence with analysis and data to drive decisions.
- The challenge is to create a digital model for an asset class that is multi-jurisdictional and has a much more complex fund structure.
- The people component is a key component to digitising complex instruments. Digitising involves a wide cultural change in order to break down the barriers between ops, tech and product teams.
- • A prime area for digitisng in the alterantives space is in onboarding of clients. Whether they are asset owners or asset managers, digitising the core components of KYC checks, documentation, contracts, real-time communication etc, will set the tone of the relationship right.
12:40 - All Star Panel: Building the next-generation operations team - How can you foster a culture of innovation to enable your team to thrive in the highly data and tech driven landscape?
- There’s plenty of evidence that diversity drives innovation. Bring in multiple offices, departments and regions in on the conversation. You don’t have to institutionalise some of these things, just create the space and let them work on it.
- The days of doing BAU, where your day was a success if nothing went wrong, but if nothing went wrong then we haven’t learnt anything. People should think like they’re owners of the business.
- On the outsourced model people still need understand what they are doing day-to-day and stay close to their outsourcers. Our jobs tend to be more one of oversight day-to-day. As we become further away from the day-to-day do they understand what that is. Its trying to keep people close to the business.
- HR are pushing more flexible working. How do we get the best from people when they are working at all times in different locations.
- How do you attract talent? Outside of financial remuneration, if you are more senior you want an outfit that offers freedom and flexibility, if yure young you want a place where you can develop that gives you something you can relate to, something you can believe in. So it goes back to culture.
- We’re all challenged with the same problems all of the time, there’s no point of doing things in isolation. Past execution there’s no competition in this space.