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  • user 8:28 pm on November 14, 2016 Permalink | Reply
    Tags: asset management, , , prediction,   

    The Uber Moment of Asset Management Just Ahead 

    The world has seen unprecedented disruption from in many sectors, as major trends such as Cloud Computing, Big Data and Internet of Things converge to what some say is the fourth industrial revolution. Now this trend is reaching .

    Our predictions

    Our predictions for asset management in this new world are:

    (1) Large mergers in the highly fragmented fund industry driven by a trend to lower fees and therefore a reach for scale.

    (2) Smaller industry players who really aim to understand their customers and implement ‘ease of use’ for the clients have the potential to jump ahead in this game.

    The Finance sector, in particular the asset management industry, has broadly been slow to adapt this technological change. One reason for this is that the sector is quite conservative but it is also in our view due to financial regulation actually protecting the incumbents.

    Technology had already an impact

    However, we have seen technology making inroads into asset management. Let us list three examples:

    a.) Exchange Traded Funds (or ETFs) would have been not possible without fast computer technology to easily replicate indices of all types.

    b.) High Frequency Trading obviously uses improvements in communication speeds thought impossible a decade ago, opening an area for new sources of returns.

    c.) The Internet has triggered transparency in the sector, on fees, on performance, on manager changes et al. We are now able to ‘prove’ that stock picking is not adding value.

    Zero fee funds coming?

    In our view, the industry is just about to see the full impact of technological change. Despite rising markets over the last couple of years, fees already came under pressure. This likely has been only the early inning as they say in baseball, and we may see even zero fee funds being offered. Commoditized offerings simply cannot be differentiated by definition and the price approaches the cost.

    According to Morningstar 70 % of all net flows in equities went into passive products in 2015, hence this trend is affecting the whole industry. Passive funds have typically lower fees than actively managed funds and reached already a 40 % market share in the US fund market for equities.

    Industrialization next stop

    Where is threat, there is also opportunity for agile players. The industry is mostly still not using the latest technology, has not cut all the processes into modules and automatized them as the manufacturing sector did many, many years ago.

    Here, new technologies such as could be helpful. While the concept may be close to its peak in terms of the Gartner hype cycle, we see a lot of areas where the technology can be applied. Isn’t it an anachronism that we can deliver milk in one hour but shares settle three days later?

    Will the Alphabets and Amazons take over?

    We do not think so as those companies have other, easier targets first. Finance is highly regulated and complex, and you need domain expertise to be successful. However, the asset management industry could profit from implementing the customer centric obsession tech companies demonstrate. Where is the Amazon type recommendation engine for financial products?

    Uberization

    Some think that Uberization stands for the currently large tech companies replacing and asset managers. Yes, firms such as Alibaba have demonstrated their ability to raise $ 100 bn quickly by using their platform. Uber stands though for the ‘gig’ economy, for a highly efficient, mostly outsourced operation that uses the latest technology and increases the efficiency of underutilized assets. Netflix or Apple demonstrated what ease of use means, Tesla shows that your product feels fresher if you car comes with a regular software update. Hence, the Uber Moment of Asset Management will create an avalanche of new, easy to handle tools, and new players who are betting on this technology are likely to gain share.

    They did not believe it in the taxi and hotel industry before it was too late. Be warned it may happen also in asset management!

    There are many more themes we could address here but leave them for a later blog post (please visit http://www.hcp.ch for future updates). For the readers in Switzerland, please feel free to attend my presentation at the CFA events in Zurich and Geneva this week.

    Feedback is welcome!


    is Founder & CEO at HCP Hohaus AdvisoryFounder HCP Hohaus Advisory

    HCP Hohaus Advisory is a company based in Switzerland focussing on state of the art, innovative asset management solutions.

     
  • user 10:00 am on October 2, 2016 Permalink | Reply
    Tags: , , prediction, ,   

    FinTech Trends: #1: Silicon Valley is coming 

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    In my previous post https://www.linkedin.com/pulse/fintech-era-9-mid-term-trends-bet-roberto-ferrari?trk=mp-author-card I noted down the 9 future trends, taken from my recent book “L’era del FinTech”.

    Here i focus a bit more on the first one that i called : Silicon Valley is coming (and actually they are not alone..).

    have been shielded for centuries from competition. We couldn’t imagine until months ago a world without banks. Now things are changing, fast. Global digitization is creating a double effect: a) entry barriers to any market are brought down to new competition, and financial sector makes no difference; b) the new economy is creatingnew omnivorous global internet and players, that are turning their heads (and their investments) also to banking and FinTech.

    A very recent chart from the WEM (World Economic Forum) shows the latter with no need of additional explanation.

    The world economy is increasingly becoming dominated by big global tech and internet giants across many sectors. Banking could be one of the next ones? So, what are the key moves the Apples and Googles are making?

    Number 1 – Investments in FinTech startups : Did you know that Google Ventures is the third most active VC investor in North America Fintech companies since 2011, according to KPMG/CB Insights, and holds investments in key FinTech players such as Robinhood, OnDeck or Ripple and many more? Google is not the only one. Intel, Salesforce, Microsoft, Apple, Amazon they have all made investments and acquisition of FinTech startups.

    Tech companies and internet giants have interest in FinTech as the last one has the potential to efficiently reach large masses on a global scale (see the payments story afterwards), take a significant slice of globally banking revenues and redesign significantly cheaper operations.

    Number 2: Playing with payments. Apple, Facebook, Google, they are all playing with digital payments (proximity and/or remote) with several branded initiatives. Amazon was the first one to do so twenty years ago, in order to build its ecommerce platform and has months ago announced that will move forward, beyond its own platform. Why that? Because payments are one of the the biggest commodities in the world, are the entry point to billion of customers and their own spending and life style data, and both technology and regulation are making easier and easier for an over the top to build a digital proposition on top of global banking and payments rails (old and new). Tencent and Alibaba are also showing the way from China. It is very likely that in very few years we will see a totally different competitive scenario. Will banks be ready to react or they will end up like MNOs in the Telco industry?

    Number 3: Increasing competition among omnivorous: Globally, competition among big tech companies will increase. There has been so much room for growth so far that there was not so much need to compete. But now, Chinese and Asian competitors are getting very strong, and at least in the Western World there’s is far less room for growth. Apple Pay is already competing with Android Pay for proximity payments and with PayPal and Amazon for remote payments, Facebook Messenger payments could become a strong competitor too. Stronger competition among big tech/web players will lead to greater investments and new competitive services, also in the financial sector if they decide to do so.

    To conclude, it is not just from Silicon Valley, it is from the increasingly global and dominant internet and tech players that the threat is coming to banks and traditional financial institutions. This is serious and big as no one in the retail banking industry has the global scale to compete with them. How banks will behave and react? They have started to cooperate with Apple, for instance, but not everywhere. Is that correct or it is instead a forced, inevitable compromise that will ultimately de-touch customers from banks? And what will happen if digital giants will move to lending (as some is already doing?) or, even worse, if they will start to aggregate fintech platforms and startups to great a totally new competition on a global scale?. Piece by piece…….


    is General Manager CheBanca!

     
  • user 3:37 am on June 10, 2016 Permalink | Reply
    Tags: , CrowdVoting, , , LUKB, , , , prediction,   

    LUKB Launches Crowd-Voting Platform for Stock Market Prediction and Plans Crowdfunding Platform 

    Luzerner Kantonalbank () has launched Crowders.ch, a digital that allows users, or &;Crowders,&; to predict the performance of the 30 securities composing the Swiss Leader Index (SLI).

    Crowders.chCrowder.ch LUKB crowd-voting stock market is unique in its way as it is the first platform in Switzerland that uses the power of the online community to predict the . It aims at proving that &8220;collective intelligence&8221; or the &8220;Wisdom of the Crowd,&8221; can predict market trends more accurately than individual investment professionals.

    The assessment is carried out as voting and is summarized on a monthly basis. The aggregated forecast is then used by LUKB&;s fund management subsidiary LUKB Expert Fondsleitung AG as a reference for the weighting of the new equity funds LUKB Crowders TopSwiss with securities from the SLI. SLI is made of the 30 largest and most liquid securities in the Swiss equity market.

    To incentivize the community to participate, Crowders.ch rewards those who predict the trends right. These people receive points and are ranked based on their performances. The best-ranked people receive monthly rewards.

    Crowders is the first product of LUKB&8217;s Crowd Bank offerings. Committed to digitalization, the bank said it to develop a number of crowd-based platforms aimed at solving financial issues.

    Later this year, LUKB will launch Funders, the bank&8217;s own platform.

     

     

    The post LUKB Launches Crowd-Voting Platform for Stock Market Prediction and Plans Crowdfunding Platform appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.

    Fintech Schweiz Digital Finance News – FintechNewsCH

     
  • user 7:35 am on June 6, 2016 Permalink | Reply
    Tags: axzz4ALNEamMS, , , , prediction,   

    The Road Ahead: 3 Big Insurance Trends for the Next 12 Months 

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    and prognostication must be traits buried right in the genetic core of the human species. People’s desire to peer around the corner into what they can’t see and try to make sense of the shapes and shadows is almost a basic need.  It makes us feel smart, it provides comfort as a source of clarity, it lets us show off our expertise.

    So, while I may be motivated by some weird base instinct to call the industry’s shots- I also genuinely think the next year will turn out to be unlike any the industry has ever seen. At the least, we’re beginning to see some tectonic shifts in how insurance does business as it starts succumbing to the inexorable forces of , customer demand, and most importantly, as it finally gives in to good old fashion evolution.

    Here are the three big trends in insurance that I see taking shape over the next twelve months.

    1.  Venture capital firms will start to pick leaders

    There’s strong demand for insurance technology investments in the VC community right now. According to CB Insights, there was $2.65 billion in VC investments in insurtech companies in 2015, about three-and-a-half times the amount invested in similar companies the prior year. This makes sense too. Insurance is one of the remaining industries that hasn’t yet taken a huge, technology-based step forward and VCs are finally realizing the potential impact technology could have on how it’s bought, sold and administered.

    So, while there has been a massive demand for insurance investments from the VC community, beyond employee benefits, the actual pace of investment has been relatively low due to an almost complete lack of investment opportunities with attractive business models, proven teams, and productive uses for their capital.  Even including benefits, while $2.65 billion is a lot of money, it’s a small percentage of the $128.5 billion in VC money that was raised last year.

    Over the course of the next year, we’ll see a few strong financial models emerge from companies who took seed rounds over the last 18 months that will attract sizable Series A rounds to fund growth and establish leads in their market segments.  The noise and buzz around insurtech has already spawned a growing number of me-too copycats and business model clones but, as has happened with other formerly hot sectors for venture capital- the on-demand economy and marketplace lending- the benefits of scale and access to capital will accrue almost entirely to the innovative first movers. 

    2.  Carriers will start more meaningful partnerships with startups to drive innovation

    You can bet that all carriers are already having discussions about this in their boardrooms right now, it’s reflected in strategic VC investments even if not yet in meaningful operating partnerships, but over the next year we’ll see which carriers will actually pull the trigger on deals – be it acquisitions or partnerships – that lean on startups to help them jumpstart the pace of innovation inside the company.  We’ve started to see meaningful partnerships with technology companies from the large only recently, but there is reason to think that insurers will move faster.

    Most of this activity will happen around finding new means of distribution, new ways to help claims adjusting, big data analysis for underwriting, and early efforts at incorporating the Internet of Things. It will be a fairly incredible thing to see for a couple reasons: first, it will be impressive to see massive companies realize that they can no longer “move at the speed of insurance,” and, second forward-thinking carriers who welcome technology to the fold will create sizeable business advantages against their more luddite rivals, and do so more quickly than ever before possible.

    3.  Migration of talent from old guard companies to insurtech startups

    As insurtech companies raise larger amounts of capital, more and more executives from established insurance companies will start to join their ranks. Lemonade’s hires from AIG and ACE and Embroker’s own recent addition of Tom DeMichael from Willis will be the first wave of a larger trend as property and casualty focused startups will by their nature require more industry expertise than the first wave of employee benefits startups like Zenefits.

    As funding increases for insurtech leaders (see prediction No. 1), on-hand cash at these startups will allow them to lure top talent away from the industry giants, just as the massive carriers and brokers alike will be adjusting to the brave, new world of insurance by trying to cut bloated cost structures. Seasoned execs that are dynamic enough to thrive in the fast-moving startup environment will be in short supply, creating great opportunities for the available free agents and new entrants alike.

    Each of these are trends that will be at play not only over the next 12 months, but for several years at least to come.  However, I expect now is when we’ll start to see real movement on each.  One thing is clear: the insurance industry – as well as the burgeoning insurtech market – will be an incredibly interesting space to watch.


    is founder & CEO of Embroker and a version of this post first appeared in the Embroker Blog

     
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