Please find herewith the full article published on 11 July 2016 By Robert Van Egghen:
Asset management is the next frontier for financial technology, according to financial services consultancy Kurtosys.
While robo-advice may be the most well-known example of fintech involvement in asset management, other areas of the industry are set to see innovation in the next few years.
"We have now begun to see leading figures in the fintech sector coalesce around the asset management sector. They are right to do so," says David Prosser, an author at Kurtosys.
Ignites Europe lists six of the fintech startups aiming to revolutionise asset management.
The UK startup, which has already signed up one of Europe’s largest asset managers, provides cloud-based solutions that automate compliance monitoring. The aim is to avoid forcing users to download software onto their IT systems.
Lory Kehoe, senior manager at Deloitte, says FundApps' "up-to-the-minute, customer-oriented technology solutions [...] make shareholder disclosures across multiple jurisdictions easy for their clients."
While much of the regulatory technology, or regtech, sector remains in the nascent stage in Europe, FundApps is attempting to lead the way.
The UK robo-adviser aims to democratise investment with a starting threshold of just £250 (€326). The platform is aimed at those aged 25-40 – an age group for whom the platform’s founders claim traditional investment opportunities are often out of reach.
Wealthify offers five different “investment styles”, from “adventurous” to “tentative”, with investors assessing their own attitude to risk through a series of questions.
“We are not trying to replace the incumbents. We are catering to a market that in the past has been excluded,” says chief executive officer Richard Theo.
Dubbed "Morningstar meets TripAdvisor", this Israeli startup rates funds and fund selectors based on user-generated reports. The website, which is free to use, covers 96,000 funds listed in 73 different countries. It also allows investment advisers to run their own virtual fund of funds and ranks them as asset allocators. Around 350 users are already rating funds.
"It's about time that funds are rated on the basis of parameters that have been proven to work, and that fund selectors and investment advisers are judged according to their ability to add value to investors," says CEO Oren Kaplan.
Zeroflows enables asset managers to search and share information on liquidity in emerging and frontier markets.
Launched in July last year, the London-based startup already works with 19 different fund managers, a mix of big-name global and local managers that are responsible for $35bn (€31bn) of assets.
The aim is to get asset managers to post anonymous indications of interest. With much stockmarket liquidity in frontier markets residing in the hands of high net worth individuals, Zeroflows then tries to join asset managers up with local brokers with potential access to these individuals.
"Frontier equity markets provide big opportunities for investors but a major challenge is controlling the information leakage that occurs when investors seek to find the right brokers to help secure a big deal," says Lawrence Wintermeyer, CEO of Innovate Finance, which champions fintech in the UK.
"[Companies like Zeroflows can provide] a platform that makes it easier for investors to find the right people to trade and invest with immediately without revealing investment intentions to loads of different brokers that have been approached while searching for information about deals."
This Dutch startup claims to be “at the forefront of next-generation econometric modelling”. In other words it models adverse effects on asset portfolios from potential geopolitical, economic or monetary shocks.
Symetrics is in the process of building portfolio software programme SyMath. It hopes to reduce SyMath’s reliance on historical data by adding behavioural rules and current economic data to it.
The firm won last month's BNP Paribas International Hackathon 2016 in London, creating an app that enables asset and portfolio managers to stress test clients' investments in a few simple steps. Symetrics will now work with experts from BNP Paribas to help develop the current solution.
Spain has lagged behind other European countries in the field of fintech. Feelcapital, Spain’s first robo-adviser, aims to speed up the process of tailoring a portfolio to the individual investor. Investors receive a weekly report on their portfolio’s performance.
The platform only trades in mutual funds as they offer greater tax efficiency for investors due to Spanish law not requiring taxes when transfers between funds are made.