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What does 'going digital' really mean for pension funds?

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Evolve or Die?

, Oliver Jaegemann

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Evolve or Die?

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Innovate to Invest: a presentation to the STOXX’ annual conference, focussing on digital disruption and opportunities for investors.

 

I had the pleasure of presenting at STOXX’ annual conference this week – Innovate to Invest – focussing on digital disruption and opportunities for investors. This is a theme which is at the core of our strategy at the Asset Management Exchange (AMX). Indeed, the need for innovation and disruption is becoming increasingly apparent across the asset management industry each day.

 

The particular disconnect which strikes me is the speed at which digital evolution is adopted when it comes to making money, be it absolute return, liability hedging or otherwise, compared with the industry’s lackadaisical approach to investing in the investor experience. Of course, making money is critical for any successful investment business, but it seems that where there is a return to be made, budgets are unlimited.

 

However, when we look at the other side of the coin – the investor experience – our industry’s investment and innovation seem to have fallen off a cliff. For institutional investors, for example, not only does it take weeks to implement any decision due to the labyrinthine paper trail, but the costs that need to be paid out to lawyers, consultants, and operation due diligence experts are eyewatering. And it’s no different for managers either – they need hordes of staff to prepare client reporting, to find new business and to service their existing clients. The time and money that is wasted by all parties are astronomical. And most importantly this is impacting the end investor and their retirement.

 

I think the industry is missing a trick by focussing innovation and technology only on one direction – thereby continuing with an antiquated system simply because it’s what we’ve always done. This is where technology can really make a difference. The right technology can streamline the process, reduce resource duplication and deliver cost and time benefits to both sides of the market. It can also overwhelmingly improve the entire experience.

 

To improve the overall experience, we were faced with a choice – either to build a disruptor from within the industry which is shaped around our processes and how our managers and investors work, or simply to wait for an external player to get involved and decide how we ought to evolve via their own digital disruption platform. Unsurprisingly, this wasn’t a tricky choice and the AMX was born.

 

AMX is open architecture which means we can share across the industry to create just one single, simple and absolute exchange in the market to create a smarter, easier and cheaper for all.

 

The exchange has been designed to bring greater efficiency to the global industry. By centralising and standardising a variety of duplicate processes like compliance, reporting and administration it makes the entire value chain timelier and less complex – thereby saving costs. With over $3bn in assets already on the platform, many managers and investors are reaping the benefits of the exchange.

 

Innovation and evolution are at the core of any successful strategy and AMX is ready for the challenge to create an-end user experience to be proud of.

 

Faced with evolve or die, we chose to invest, innovate and flourish.


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