Company overview
FundsDLT is a decentralised technology platform based on distributed ledger technology (DLT) that enables the reengineering of the investment fund distribution value chain. From front to back, covering the entire fund lifecycle, our fully integrated model makes investment fund distribution easier, cheaper and faster.
FundsDLT is shifting the technological paradigm in the wealth and asset management industry using a decentralized network and APIs. We streamline a range of fund administration and order-routing tasks by using blockchain to automate several processes in a secure manner. The platform enables a cooperative ecosystem between all actors in the investment fund distribution chain to exchange data in real-time and remove redundant activities.
Launched in 2020, FundsDLT operates mainly in Europe and is backed by four major players in the industry: Clearstream, Credit Suisse Asset Management, the Luxembourg Stock Exchange and Natixis Investment Managers.
Thought leader: Olivier Portenseigne, Chief Executive Officer
Email: Olivier.Portenseigne@FundsDLT.net
Olivier Portenseigne was appointed CEO of FundsDLT in May 2020. Prior to this Olivier led the development of FundsDLT from its inception in 2016, as a project for growth and change initiated by the Luxembourg Stock Exchange and its subsidiary Fundsquare.
From 2013 to 2020, he was also the Managing Director of Fundsquare, the fund market infrastructure leader in data management and exchange. During his leadership, the company experienced high levels of growth and new business and he oversaw the launch of numerous new products and services.
Olivier has more than 25 years of experience in the fund industry. He previously held various senior management positions related to shareholder services and distribution support at RBC Investor and Treasury Services.
Challenges: What do you see as the main technology and technology-related challenges for the wealth management sector through 2021?
Digital transformation of wealth and asset managers and the digital delivery of products and services has been vastly accelerated. A few pioneering firms are well placed to proceed to the next level; however, many others are struggling to get up to speed. Often, sections of the same firm work under wildly different realities and have differing visions when it comes technology adoption.
The make-or-break challenge in 2021 is to finally move to an organization-wide – and more importantly an industry-wide – model of seamless digital delivery. Lack of past investment in this area may hamper some. The key then is to focus on automation, cost-effectiveness and process and operational efficiency.
In an environment of ongoing fee compression and greatly changed investor expectations, wealth managers must embrace technology to remain relevant. In general, because of the shock of 2020, one can argue that the wealth management sector has had digital transformation forced upon it. With a timeframe that is not of their choosing, this is not a sustainable position to be in and firms with low levels of tech adoption will struggle.
We have seen that the sector as a whole has proved resilient and has responded well so far. Nevertheless, there is much work, especially at ecosystem level, to be done.
Opportunities: What do you see as the main technology and technology-related opportunities for the wealth management sector through 2021?
Doing more with less, delivering services more cheaply and efficiently, as well as transforming client experience and improving investor engagement, are all at the front of wealth manager’s minds. Moving to a better client experience is not new to the sector but now is the time for real change.
As many wealth managers reach out to new client segments and target the new generation of investors, hyper-personalization will become the norm. This means understanding the real needs of investors and providing the appropriate services at the right time. Clients now expect data and information on-demand as a baseline in any investment offering and technology enables this to be a reality.
Additionally, process automation has potential for the industry. Wealth management is particularly plagued by manual administrative processes that, fundamentally, have not changed for decades.
However, for profound transformation of the sector, distributed ledger technology (DLT) is a game changer. DLT greatly reduces costs of administering assets and increases operational efficiency. As the backbone of an infrastructure, it is the foundation that can be complemented with services improving client experience, from onboarding to client servicing, throughout the investment life cycle. Blockchain, smart contracts and tokenisation will enable wideranging structural change and the creation of entirely new business models for wealth management.
Client Focus: When considering your wealth management clients and prospects, where are they currently focusing their technology investments and resources: clients, advisers/staff or their business infrastructure?
In this new environment, wealth managers are seeking to transform all aspects of their business. For obvious reasons, they are first of all focused on the front office, client-facing tasks and advisor productivity.
Nevertheless, there is a clear trend to go beyond this and dig deeper into operations and back office processes. Transformation from front and middle to back offices and across an entire organization, if done correctly, is a powerful way to open up many opportunities to grow or maintain a competitive edge. Savvy wealth managers are now looking at all the interdependencies between the entirety of their processes.
Excite: When you look at the technology capabilities and resources now available to the wealth management sector, as a solution provider, what excites you most in 2021?
Wealth management is poised to become a smarter industry that will provide value and solutions to a broader base and range of investors. The changes that have begun will lead to more a vibrant ecosystem.
An increase in interoperability is important for this future. We see a shift away from fragmented change, in which, for example, only front-end innovation is emphasized to an organization level of intelligent operations. Data and information will flow seamlessly via DLT, cloud technology and APIs between all actors in the value chain. This will create opportunities for further innovation.
Focus for 2021: As a solution provider to the wealth management sector, what will you be doing in 2021 to help your clients and prospects meet their main technology and technology-related business needs?
We will continue to encourage overall adoption throughout the industry and strongly support wealth and asset managers in their digital transformation efforts. In this regard, there are three main issues for firms: willingness or ability to change and choosing solutions that make business sense.
Of these the ability to change is the most significant. Hesitation when it comes to technology adoption is understandable, particularly in wealth management with its well-established business models and behaviours. Where does one begin? Too often, firms either attempt to change too many aspects of their business at the same time, or, conversely, they take the other route and skirt around the edges with unrelated innovations. However, without a fundamental change in mindset, as well as specific talent and expertise, both of these ways can often be unrealistic.
When it comes to technology, wealth management firms need a vision that is strategically long-term and is not fragmented. Firms should create strong use cases for all technology adoption, start working from there and continue improving incrementally.
This is where FinTechs can add value. Working together and integrating financial technology within an organization will help build next-generation wealth management ecosystems and solutions.
This article is from The Wealth Mosaic's WealthTech Views: Looking into 2021 Report. Access the full report here.
