Koen Vanderhoydonk:
Welcome to another podcast episode, right from Venice at OWIN 2023. And I have a very nice guest with me, which I know for a long time, it’s Kurt and Kurt works for Objectway. And Kurt today, diamonds are forever. What’s happening with the diamonds?

Kurt Vanhee:
Thank you very much for having us. And welcome to OWIN23 in beautiful Venice. Diamonds are forever. And I hope that also Objectway will be forever. In the last few months, with our team we have tried to look at the reality of wealth management. I’ve seen that staying ahead and about management is not that easy. And that’s the reason why we have been thinking of what we can do and what we will have to do to deliver additional value to our clients. And we have tried to segregate that in three, four components that we have interconnected like you interconnect a diamond, you know, the diamond has many facets, some of the facets are interlinked. And if you have three of them, or four of them, they’re all linked together. And that’s what we have tried to do. Now for us, there are four facets in current wealth management. So first, is experience. The second one is offering. The third one is configuration. And the fourth one is sustainability. This goes very fast.

Koen Vanderhoydonk:
What bring them together? I mean, a diamond only makes sense if it’s a nice piece of art.

Kurt Vanhee:
Exactly. But all the facets are linked to each other because there are only four. And we see that what is important in wealth management today is delivering what the client wants, at the moment that the client wants it in a sustainable way. So what we call those, so hyper personalization, or conscious banking, textual banking, that is all integrated in this diamond framework.

Koen Vanderhoydonk:
This morning, I was listening to your company chief, and he was explaining that sustainability is like an add on, it’s a cherry on the cake. Why is it on top of it?

Kurt Vanhee:
Because clients and also employees want to work in an environment and clients wants to receive services from their banks, and from the wealth manager, which are compatible to their view of sustainability. They do not want to wastepaper anymore. They do not want to waste energy anymore. So, you don’t have to be the best one as a private bank or a wealth manager, you don’t have to be the best one in a sustainability mood. It needs to be compatible with what your client has, as a view as you as a company.

Koen Vanderhoydonk:
So it’s almost boiled back to this hyper personalization.

Kurt Vanhee:
Indeed, and it’s also what ESG MiFID is about. What the client wants at the moment that the client wants it in a way that the client wants it.

Koen Vanderhoydonk:
Which is the typical type of customer that you guys deal with?

Kurt Vanhee:
Our clients are all in wealth management, that has been our DNA for the last 30 years. But, in wealth management, of course, you have different faces, you have retail banks who are offering a world of different services, you have private banks and independent wealth managers, and then you have the asset managers. These are most of our clients that are also attending our event.

Koen Vanderhoydonk:
Would you see a difference between for example, what’s happening in Europe versus the things that are happening in Canada? I’ve noticed that you are also working with this geographical area.

Kurt Vanhee:
I believe that we have selected a number of target markets with Objectway and Canada was one of them. We have done that because we believe that if you go to Canada or you go to France, the business of wealth management is pretty much the same. You have a little bit a different incarnation of regulations, but the regulator does not reinvent the wheel. So regulations in Canada, regulations in Belgium, regulations in France, it comes all down to the same thing.

Koen Vanderhoydonk:
And in terms of customer base, because also today, there has been some introduction about the transfer of wealth going to the younger generation, is this something similar, like in Canada than it is in Europe?

Kurt Vanhee:
I believe that the transfer of wealth to the younger generation is something that is pretty much underestimated by the business.

Koen Vanderhoydonk:
Well, the figures showed that as well, today.

Kurt Vanhee:
Exactly, exactly. And has been proven by a number of companies that I have spoken with, and in the recent past, that wealth managers are pretty much focused on the people that they are familiar with. But if they go broader in the family, (the children, the spouses), these are less known, but it is really a threat for a wealth manager, that this transfer might mean that they will lose the asset under management.

Koen Vanderhoydonk:
And in your opinion, what would be then the next best action that a wealth manager has to take or has to take, in order to capture this younger generation?

Kurt Vanhee:
I believe that systems have to be designed in a way that they are accessible for more people in the family. So, the one-to-one sessions and wining and dining that has been the classical way of communicating and talking with clients, I think that is not the right approach anymore. And the communication about the assets and the wealth of the family has to be distributed and discussed in another way, compatible also with the way younger people are operating.

Koen Vanderhoydonk:
And earlier, it has been said that the glue to the story could be ESG and sustainability, meaning younger generation may be more triggered by what’s happening around sustainability.

Kurt Vanhee:
Absolutely, absolutely. And they’re also in the business, you have the big discussion there. Is ESG important? Or is the portfolio performance?

Koen Vanderhoydonk:
It’s a provocative thinking. But I was listening to a professor not so long ago, which was around sustainability. And he said, it cannot be that when you put a restriction on a portfolio, that per definition, you have a better result, it should be the other way around. So it needs to be a preference of you deliberately choosing and maybe jeopardizing slightly on the performance, but focusing on ESG.

Kurt Vanhee:
It has to be a combination of the two, you cannot have your wealth managed in an ESG preferable way everything. So, it has to be a combination of risk performance and ESG.

Koen Vanderhoydonk:
Today, we are here in Venice. And this morning, we had the one of the prominent people, a professor from Venice, talking about how to do innovation, and I thought he was particularly inspiring, especially by the words, culture or tradition is a successful way of innovation. What brought you to Venice? Is there a link with what you do today?

Kurt Vanhee:
Yeah, absolutely. And what I remembered from his speech, I only remembered a few words is that tradition was innovation at that time.

Koen Vanderhoydonk:
Yeah, it’s great!

Kurt Vanhee:
So you have to think about tradition is not by definition, bad. Tradition is also innovation. I think what we wanted to the story behind Venice is that we wanted to show that indeed, what was innovative at that time, because if you go into the city, and if you imagine how this city was built so many years ago, without the technique that we have today, so it was really very, very creative, and it was innovation at a time. So, what we want to show is that this innovation can still trigger other innovations.

Koen Vanderhoydonk:
That’s exactly what the professor was actually preaching like, it was a real nice talk.

Kurt Vanhee:
So what I remembered for that day, I was impressed by the statement that indeed tradition was the innovation of yesterday.

Koen Vanderhoydonk:
The last question is: what would you see as the most prominent trends, maybe take taking a look at Benelux wealth management?

Kurt Vanhee:
A final look into the Benelux: I believe that there is a lot of potential there are a lot of discussions ongoing in replatforming. Don’t forget that a lot of banks and wealth managers have been building systems for the last 20 – 30. Maybe some of them 35 – 40 years they have been merging my banks have been merging there have been there has been huge investments in integrating businesses. If I talk to private banks, you see that their architecture is huge legacy. That’s because now it becomes with a big L. Now, after 20 – 30 years, the risk is getting higher because also the people who notice legacy systems will disappear in five, seven, eight years. So, there are a lot of organizations that come to us and explain their problems. And this is a real problem. So, replatforming is a huge opportunity. It’s an opportunity also for them for creating new systems, leveraging also the knowledge that the software and service companies like Objectway have in this matter. And provide also contextual banking, delivering what the client needs at the moment that he needs it.

Koen Vanderhoydonk:
Brilliant. Thank you so much for being in the podcast today. I’m sure we’ll catch up later today. Absolutely. I would say enjoy the rest of your day and thank you so much.