InvestOps Europe 2020

16 - 18 September, 2020

Business Design Centre | London

+44 (0) 207 368 9465

9.05 - Keynote Panel: Walking the tightrope: How can you best balance regulatory requirements with business growth led projects and leverage the latest and greatest technology to build a winning investment operations division?

  • Last year was dominated by MiFID II preparation, but now that has passed asset managers can focus on more business-led projects. There is now a focus on data quality post-MiFID II implementation.

  • Audience poll showed that most of their budgets have been spent on projects that they had planned for at the start of the year. Around 30% said however, that 25-50% had been spent on projects they had not planned for.

  • There will always be things you cannot plan for though, when it comes to budget, such as client-related enquiries.

  • Regarding legacy technology, while it is important to look into new technologies and move forward, proceed with caution because at the end of the day that legacy technology is delivering things. It is about integration, acceptance by the people. People are very comfortable with legacy technology, it works. Maybe it’s not scalable but it does what it needs today.

  • When it comes to pitching new technologies, don’t present thousands of ideas, keep the messages short and simple. New technologies also don’t need to be like-for-like and do the same thing as the systems they are replacing, use it as an opportunity to create something better.

9.45 - Digitalisation Keynote: Staying on top of the latest digitalisation trends: Sharing recent successes and failures with implementing new technologies to help you build a winning investment operations infrastructure

  • Computer power has doubled nearly every 18 months. This has meant the cost of that computing power, along with the reduction in network and storage costs, the barriers to entry have come down and computing has become more commoditised.

  • The top five companies in the world, all technology companies, have not been afraid of completely pivoting their business models. Companies such as Amazon are constantly optimising their journeys off the back of customer feedback.

  • There will always be things you cannot plan for though, when it comes to budget, such as client-related enquiries.

  • Digitalisation is affecting the whole value chain. Companies previously focused on the customer facing piece, and have been guilt on where digitalisation can benefit the whole value chain.

10.05 - Guest Keynote: Enhancing Performance : 5 practical strategies to improve focus, resiliency and energy in your investment operations

  • When it comes to resilient focus and energised, versus, stressed, distracted and fatigued, it’s obvious which one is preferable.

  • You have to be adaptable, you have to evolve. From a performance and psychology perspective its – capability and emotional capacity.

  • The amount of stress is increasing in finance and banking world, that comes at the expense of recovery. Sleep is the foundation of our performance. So is focus. You can train it. 47% of the time, this mind is wandering. But you can train our attention and focus, this can also help manage stress response.

  • Chemistry in the brain - as we are stress, it impacts self-control, will-power, performance. All impacted as fatigue and stress levels increase. Lots of people who are highly capability, but lacking in capacity. But it is trainable, you can increase resiliency, focus and physical energy.

  • Stress is there to help us. If you interpret these as positive signals, then you can use it. The amount of stress we are under is less important as our perception of stress. See it as negative leads to an impact of performance as result.

  • Easiest way to manage stress response is through breathing and controlling the breath. Starting point is breathing through the belly, five seconds in, five seconds out. Can reduce stress response so you can perform better in that moment.

11.10 - Panel: MiFID II now the dust has settled – 9 months on, what have been your biggest wins and lessons learned?

  • One panelist explained the trade and transaction reporting requirements have been a huge lift for operational teams for both the business and the industry industry. By fluke or design, this has brought asset managers into scope where they had previously relied on the sell side. He questioned whether they have contributed to price transparency is open to debate, but it has been a huge bill for them to implement the infrastructure to support reporting.

  • Another panelist agreed, as the enormous increase in the number of reporting fields, and the fact you have to report on a line by line basis means at some point in the future asset managers will be fined for minor reporting errors. The FCA has not done much so far to penalise, but have been pointing out where the common errors are. The FCA patience with reporting errors is coming to an end as they have made it clear egregious reporting will not be tolerated.

  • Conversely, the panelist from EFAMA said the approach is more relaxed in France because they seem to be pushing more for practical solutions. The French authorities are also drafting proposals that could carve asset managers from the Mifid scope for certain rules. This is similar to authorities in Spain and Italy who want to protect asset managers from the negative impact of MiFID II.

  • However, there is a commerciality to the regulation, with one panelist suggesting it has encouraged them to look at customer experience. Clients want transparency over fees and costs, so it is encouraging us to provide the best experience. She explained they are stepping back and seeing how they can use the regulation to their advantage.

  • There is also a question of RegTech firms among the buy-side. Many of these firms that have sprung up from the regulation have no track record and no clients yet. Many firms are in a budgeting phase to explain what regulatory investments they are going to make, both internally and externally. But with the regulatory horizon expected to reach beyond 2020, it is difficult to articulate what their costs are with the rules constantly moving and changing.

11.50 Political Keynote The regulatory domino effect: With the possibility of MiFID III on the horizon what new reforms should you expect to prepare for going forward?

  • Do not fear MiFID III. It is further away than you might think and it will not be on the same scale as MiFID II.

  • Updates will be more about refinement and realignment as opposed to a re-write, and concerned with removing inconsistencies.

  • Moves to harmonise by the EU will likely be introduced as separate amendments. Swinburne doesn’t think they will be tied into a MiFID III package. Much discussion has gone into how to reconcile GDPR – with data retention requirement in MiFID.

  • Swinburne believes there are things that can improve on MiFID II. Access, consolidated tape, competition as new entrants arrive.

  • MiFID II was not a post-crisis piece of work. The driving force was the desire to bring the benefits of MiFID I to a wider range of asset classes. Swinburne said these aims get lost when we explain the complexity of the regulation.

12.20 - Fireside Debate: True or False? Financial market regulation has had an overall positive effect on the financial landscape after almost a decade of reform

  • At the beginning of the debate, around 68% believe post-crisis regulation has had a positive effect on the financial landscape.

  • On the side that the crisis has had a positive effect, the head of global regulatory development for AXA Investment Managers said legislation such as AIFMD and UCITS has dealt with extreme market events, including Brexit and the euro sovereign debt crisis.

  • On the opposite side, Allianz' head of customer protection advocated that the new normal post-crisis reform has pushed, such as ultra low interest rates, has had a negative impact on products. It has meant the role of alternative products have changed completely, making it more complex for firms to deal with new assets and markets.

  • The problem with illiquid assets, he explained, was that when Lehman collapsed, all of their assets which were deemed liquid became illiquid very rapidly. He said the good intent is there with the regulations, but every institution needs to do their homework.

  • Going forward, AXA's representative warned the EU regulatory framwork is in danger of politicians becoming too involved, suggesting some are already proposing reviews of the AIFMD and UCITS framework.

  • By the end of the debate, 74% of the audience believe regulation has had a positive impact.

12.40 - FinTech Spotlight: FinTech innovation disrupting the financial markets ecosystem - Which will impact your business and how can you compete in this moment of generational change?

  • FinTech is not new, been around since the 1970s. Nasdaq 70s, SWIFT 80s, PayPal in the 90s and today we have thousands of FinTech companies globally. Nowadays, there are two buckets – we care about the enablers, things that will make your job easier.

  • Average age of incumbent capital markets technology vendors is 38 years. Now we have seen around 2,000 globally.

  • Most FinTech around regulation, big data and cloud technology. It’s not about the technology, it’s about the problem it is solving. Technology is the enabler, it’s about the problem you are trying to solve.

  • You can engage with FinTech through: buying, using/adopting, partnering, investing or building. Alternatively, you can ignore them.

  • Asset management industry is years behind banks, so there are lessons to take from banks. Banks have used accelerators, corporate VCs and appointing heads of innovation.

15.30 - Fire Side Chat: How can you create a front-to-back operating model that overcomes legacy challenges to create a winning division?

  • There are not so many requirements for innovation from asset managers’ clients which is maybe why the industry is not moving so fast. Once those demands are there maybe we will move faster.

  • If you have the heart of your platforms within the firm, using external providers could be unfamiliar as you step out of the comfort zone.

  • Having multiple vendors and not being made to one solution can be advantageous. One panellist commented that when a vendor monopolises the industry in a certain way, it stifles innovation.

  • Asset managers may be five years behind banks, but the entire financial services system is 10 years behind other industries.

  • Real disruptors are going to come from the flanks: robotics and machine learning have proven abilities. Fundamental way asset managers interact with clients, information and the workspace. Interesting stuff around VR trading stations where you can sit in a chair in the middle of a field and trade. The tech is getting to a point pretty rapidly where you can have interactive workplaces.