JUNE 08, 2023
Sustainable Innovation: Insights & Perspectives from an unparalleled Panel Discussion
Senior Marketing Content Creator
Reading time: 2 min
OWINTALK | BEHIND BUSINESS, BEYOND NEWS
Led by Alberto Cuccu, Chief Solution/Executive Officer at Objectway, the insightful discussion brought together a distinguished line-up of industry experts and Objectway’s clients who shared their expertise and perspectives on the subject.
Joining the conversation were James Scott Andrews, Director & Head of Investment Management at Redmayne Bentley, Damiano Baj, Chief Operating Officer at EFG Bank, Gareth Johnson, Head of Digital Channels at RBC Brewin Dolphin and Bartosz Golba, Research Director at GlobalData.
Future areas of Innovation within the Wealth and Asset Management space
One area that came instantly to mind was AI and how that would look in terms of practical application and use cases. Chat GPT in particular was raised. James Scott Andrews, Director and Head of Investment Management at Redmayne Bentley highlighted its potential in an investment research setting, specifically in analysing and interpreting news flow for assessing investment impacts.
Other uses for AI could include enhancing customer user experience, the sales and marketing processes and other areas that are heavily reliant on accurate sentiment analysis.
The big question is of course whether humans would ever be able to trust a machine to give them financial advice? That question obviously is yet to be answered.
Approaching Innovation
The best way to approach innovation also came under the spotlight by the panel. Multiple elements need consideration. The client journey is a good starting place and the innovation element comes from redefining and rethinking it. The panel thought any element of the journey; onboarding, an investment proposal, a credit application could be broken down and reimagined optimally.
The need for a multidisciplinary approach was identified as key. Indeed cross-collaboration and the need to have an adaptive approach were thought to be integral to the Success of any innovation project. It was noted by Damiano Baj, Chief Operating Officer at EFG Bank, that the industry has never had such a portfolio of change and innovation in the pipeline like this year.
According to Baj, one element that is essential to bring to the table is talent. People with diverse experiences and competencies are crucial to challenging the status quo and breaking away from traditional approaches.
The role of the regulator in promoting innovation and change was also cited. In the UK, the PRA and FCA were thought to be very active in paving the way for positive change and innovation.
The regulator is setting up the framework and the context so that it’s possible for multiple players, existing players, new players, and peers alike to be ahead of the game and develop a new framework, for clients, for competitors, for business-to-business relationships, said Baj
Indeed, the regulator moving from being seen as a cost-based compliance burden to becoming something of a driver for innovation was seen as a positive.
This is a great mindset change If you think about it. If the regulator helps you to understand what your next evolution is target then that has to be a positive,
– Alberto Cuccu, Chief Executive Officer at Objectway.
Some thought that innovation and a change in culture was as much about the way in which a business and it composite parts collaborate to effect positive change as it was around a specific project.
Gareth Johnson, Head of Digital Channels at RBC Brewin spoke about the recent acquisition of Brewin by RBC and how that was working when it comes to culture.
Being in that wider group will make a big difference for us and we will need to think about how we leverage what RBC has globally. With 90,000 new people though, the innovation is going to be coming through culture and the business once we get to place where we can exploit what we both have and explore for the future. The innovation is going to be much more about how we collaborate as a whole business, he said.
One question he had was how to blend business ideas with technology?
One of the things you will see increasingly is a desire to react to technology and how you bring together the technologists and the business units and get them to talk the same language, he noted.
The panel agreed that innovation would be strongly influenced by how well a firm can bring businesses and people together and give them a clear vision. Eventually,
Technology is the enabler but you have to approach the business with a holistic vision and looking at all the facets of the innovation”, stated Cuccu.
Moving on to the data, Bartosz Golba, Research Director at GlobalData, was consulted by Alberto Cuccu to discuss what he reckoned as the future of innovation. Inheritance planning in this context was cited as a particular instance where wealth managers need to improve.
Many actually still do not offer any inheritance planning services if you put that in the context of intergenerational wealth transfer, it seems like someone is missing an opportunity here, said Golba.
This may be linked to actually changing mindset internally or the corporate culture inside of the organisation.
In parallel, wealth managers are beginning to recognise the distinction between tasks that can be accomplished internally and those that require external assistance. It is worthwhile to consider outsourcing or forming partnerships to access a wider range of skills and resources.
ESG spotlight
The way that people invest was also considered to need attention. The need to trust that the wealth manager is always sticking to the investment mandate – in particular the demand for an ESG overlay is becoming standard as investors want to not only capture returns but do no harm in the process too.
Pulling this back to innovation the panel remarked that sustainability is now part of the agenda and part of how most firms are looking to innovate to grow and scale – the same keywords come up time and time again.
Damiano Baj explained how his firm wanted to contribute to sustainability on two dimensions; as an asset allocator – on the investment side and also to internal and external stakeholders.
The firm now has over 400 data points and KPIs to consider when it comes to asset allocation. But, the panellist said, the qualitative oversight to drive and support the selection is as important because it amounts to the contribution in the transformation and transition required of companies.
On the internal side and stakeholder side, innovation and sustainability are essentially a cultural journey. We acknowledge this is an important cultural journey and we need to leverage experience to move the firm from being a classical financial institution to one with sustainability at its core – this change needs to happen, but we also need to remain stability during this period of innovation, he said.
The takeaway was that sustainability is helping investors to look both at the short term and long-term impact, which also extend to the client. Indeed, wealth managers are increasingly looking to leverage technology to access emerging wealth and the younger generation.
But key point is that a person’s needs and service expectations will change as they move through life.
What you wanted in your twenties is going to be something very different to in your forties or your fifties, but we often design just for where someone is now without thinking about that evolution, Johnson pointed out.
It was agreed that a lot of what people traditionally want from wealth management hasn’t changed; beyond technology, the human nature of the service and its implementation are still right at the centre of what is on offer.
And to extend that concept, an issue that is common to all clients is that of trust. Today, more than ever, wealth managers need to build up trust for the long term; that includes trust with existing and future, next generation clients.
Indeed, the next generation requires a bit of guesswork as they are yet to become clients.
That’s a real challenge in terms of innovating and agreeing to spend on that innovation, said Andrews.
However, what is certain is that without trust wealth managers will not be able to attract and retain the next generation of clients.
