On Tuesday lunchtime, during the ALFI Spring Conference, Simon Ramos, Partner Advisory & Consulting at Deloitte Luxembourg, presented a paper on how FinTech will impact distribution.
According to the paper entitled "How Can FinTech Facilitate Fund Distribution", published by the Association of the Luxembourg Fund Industry (ALFI), the surge in FinTech is starting to reshape the financial sector on a global scale with a flourish of new players attracting significant attention from markets, customers and investors. ALFI believes that Luxembourg asset servicing firms have a major opportunity to help asset managers and distribution intermediaries to succeed in the change.
FinTech is reshaping the operating model of asset managers, distribution intermediaries and their service providers. Simon Ramos stated "FinTech will be a game-changer in investment management operating models. Luxembourg's strongly connected industry players are well positioned to ensure that Luxembourg is the driving seat for innovation."
Denise Voss, Chairman of ALFI, stated "FinTech is more than a buzzword. It will have a fundamental impact on the operating model of asset mamagers, distribution intermediaries and service providers, who are also facing new investor behaviours. The investment management ecosystem has not only to increase efficiency, but also to provide a better customer experience if it is to succeed in the future. In order to help asset managers and service providers to adapt their respective business models, ALFI has established its digital / FinTech Forum whose aim is to highlight the challenges and opportunities inherent in new digital technologies."
The main points of the paper outline the growth and driving forces of FinTech, with four mega-trends: a new generation of investors, technological innovations, a data surge, and a complex and evolving regulatory landscape.
Luxembourg currently has more than 150 FinTech companies active in a dynamic FinTech sector and supporting the fund distribution value chain, with organisations such as Amazon Payments, PayPal, Rakuten and Yapital already established in the Grand Duchy, with incubators such as the LuxFutureLab attracting new companies.
On the issue of Blockchain, he issued a call for caution as he feels that the regulators will have someting to say about this new concept, with enhanced regulation bound to come in the future, coining the term "RegTech" to encompass cost, flexibility, performance/scalability and security. Big Data is evolving from being a buzzword to becoming a reality, with better services being defined. On the other hand, he sees that RegTech will provide Luxembourg with a competitive advantage, specifically in Transactions reporting, Regulatory reporting, Regulatory watch and Online services. Luxembourg will also be able to offer white label FinTech solutions, with asset servicers offering one-stop-shop FinTech services to asset managers.
Denise Voss also referred to the House of FinTech currently in the process of being established in Luxembourg.
The 2-day ALFI Spring Conference 2016 is being held at the European Conference Centre in Luxembourg-Kirchberg on the topic of "Future Perfect".
Photo by Geoff Thompson (L-R): Simon Ramos, Deloitte Luxembourg; Camille Thommes, ALFI
