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Transcript

AIM High: Innovation in financial services · Two in Twenty

• 0:02
  SPEAKER_00: Hello, and welcome to another episode of AI.
• 0:06
  SPEAKER_00: My name is Twink Field.
• 0:07
  SPEAKER_00: I'm the CEO and founder of White Marble Marketing.
• 0:10
  SPEAKER_00: And today our podcast is focusing on innovation in financial services with revenue pressures and the move to lower fee passive products and new regulation, asset managers are having to focus more than ever on cost management and economies of scale and digitising key functions.
• 0:32
  SPEAKER_00: So to help us pick through all of this, we've got two great speakers, Olivia Vinden from Alpha FMC, who's the head of FinTech and innovation there, as well as our very own Andrew Scott from White Marble Marketing, who is forever keeping us uh thinking and on our toes about what's innovating within our landscape.
• 0:54
  SPEAKER_00: So thank you so much for joining us, Livs and Andrew, uh, for a great episode, as I hope it will be, on innovation in financial services.
• 1:03
  SPEAKER_00: As has become customary here, it would be great if you could each introduce yourselves and maybe uh give some thoughts on how you see the state or health of innovation in asset management.
• 1:15
  SPEAKER_00: So you see it.
• 1:16
  SPEAKER_00: Liz.
• 1:16
  SPEAKER_02: Great.
• 1:17
  SPEAKER_02: Hi.
• 1:17
  SPEAKER_02: Thank you so much for having me on the podcast.
• 1:19
  SPEAKER_02: So I'm um head of FinTech and Innovation at Alpha Asset Management Consultancy, which is uh a specialist asset and wealth management consultancy firm.
• 1:27
  SPEAKER_02: Um we launched the practice in 2017, and I think it was one of those things where we're a bit too early because the state of innovation in asset management and wealth management has been quite slow.
• 1:36
  SPEAKER_02: But it's exciting now because at the beginning of 2020 we're beginning to see things change, and especially in the largest firms and the smallest firms, there'll be some really exciting things to talk about.
• 1:46
  SPEAKER_00: Fantastic.
• 1:46
  SPEAKER_00: Andrew.
• 1:47
  SPEAKER_01: And I'm Andrew Scott, and I'm the MD at White Mobile Marketing.
• 1:51
  SPEAKER_01: Um, and my background, I guess, has been in digital marketing and digital transformation.
• 1:55
  SPEAKER_01: So I've always had an interest in um how we can see innovation flourish inside you know large asset management firms quite often.
• 2:02
  SPEAKER_01: And I guess I see quite a uh a variety of um innovation attempts.
• 2:07
  SPEAKER_01: So perhaps we see almost more visible innovation around wealth because they do robo advice and they do those sort of cooler things.
• 2:14
  SPEAKER_01: It's a bit harder in the big firms, and so we see sort of perhaps them being a little bit behind the curve.
• 2:19
  SPEAKER_01: But I'm interested in seeing how we can um foster innovation inside these firms.
• 2:24
  SPEAKER_01: So the entrepreneur type model of saying how do we make it actually easier for small teams within big firms to kind of deliver innovation.
• 2:32
  SPEAKER_01: So that's of a real interest to me.
• 2:34
  SPEAKER_00: Brilliant.
• 2:34
  SPEAKER_00: Great.
• 2:35
  SPEAKER_00: We'll hopefully get to that too.
• 2:36
  SPEAKER_00: Um maybe to your to your comment, Lives, on on you're now beginning to really see in early 2020 some real change happening.
• 2:44
  SPEAKER_00: It'd be great maybe to start with really what's driving that change and and to Andrew, how do we how do we create a sort of better culture for uh for innovation?
• 2:55
  SPEAKER_02: Yeah, well, so I think there's there's a lot of macro changes that are happening.
• 2:59
  SPEAKER_02: So, one, there's the really big growth in assets.
• 3:01
  SPEAKER_02: All of the firms that we're working with are working to business plans where they're saying we're expecting our AUM to double.
• 3:07
  SPEAKER_02: Um so there's a this really big growth in assets, but then you've also on the flip side of that got this real pressure on fees and on margins.
• 3:13
  SPEAKER_02: And so that's just fostering, I think, a bit of a change in attitude from board level down to how can we innovate, how can we do things in a more imaginative way that's bringing better solutions to our clients, but maybe slightly differently than just adding more people and more heads.
• 3:29
  SPEAKER_01: Yeah, I think as Liv says, there's there's so many um pressures coming onto asset management firms.
• 3:35
  SPEAKER_01: And I think that um, we see things like um the pressure on cost and therefore firms almost having to choose scale, or if they're more at the boutique end, you know, creating a story and experience that makes them a viable alternative to just scale.
• 3:53
  SPEAKER_01: Um I think we we've talked in the past in in other places about the experiences that people are having in other industries, and so they expect that experience to transfer into to our industry.
• 4:05
  SPEAKER_01: So if you can if you can engage with Amazon as a platform and see it dealing with other third-party suppliers as well as their own, you know, why can't I find that?
• 4:14
  SPEAKER_01: And of course, asset management does have platforms, but I think maybe we'll see new platform growth uh coming in the industry.
• 4:20
  SPEAKER_01: Um I think um the rise of the machines and and AI is is another thing that's that's coming our way.
• 4:27
  SPEAKER_01: And I think we're really grappling, I guess we focus on marketing in particular, and we're sort of grappling with, well, where do machines and AI fit into the the marketing mix?
• 4:39
  SPEAKER_01: Um and I guess what it what it means for a lot of people in marketing is starting to understand and and use um uh machine learning to handle large volumes of data, whether that's around personalization or something like that, but then therefore thinking about the change in skills that they need to adopt to remain as, you know, sort of marketers uh uh in the changing industry.
• 5:00
  SPEAKER_01: Um I suppose the other thing that I I was just interested, though, was just coming back to the experience piece.
• 5:06
  SPEAKER_01: And I think that that's something that firms are really only getting to terms with now is how to build a genuine customer experience.
• 5:14
  SPEAKER_01: So um most of the big firms who are used to working in the NC and wholesale market, we're we we find it really hard to do sort of genuine people-to-people marketing, right?
• 5:25
  SPEAKER_01: We find it really hard to build experiences that are totally focused on the client and the customer, because we come from a background of typically just being able to explain what the product does and for professional investors or you know, advisors or consultants to you know make those selections.
• 5:39
  SPEAKER_01: And I think the brave new world, we we we will have to provide a customer experience that enables people to um have the same experience that they have in other industries.
• 5:48
  SPEAKER_00: Yeah, I mean it's interesting actually, um, in some of the prepping for for today, so looking at some of the key things you've got to get right to sort of build that culture, um, being to your point around you it's about the prioritization that comes right from the top, from the board, from the CEO, CIO, making sure that that um sort of need for change, drive for change really is sort of the tone is set there.
• 6:09
  SPEAKER_00: Um but uh I guess also that's to your point, uh taking a kind of a client journey approach to sort of uh approaching that change, right?
• 6:19
  SPEAKER_00: From the onboarding to the reporting and how you can use sort of technology at those different stages to create those efficiencies.
• 6:26
  SPEAKER_00: Is that is that how you're talking to clients these?
• 6:29
  SPEAKER_02: Yeah, exactly that.
• 6:30
  SPEAKER_02: So we run a digital survey of our clients ever every year, and and this year for the first time, culture came out as the biggest um impediment to people implementing real change within within Asset and wealth managers.
• 6:41
  SPEAKER_02: And I thought that was really interesting because we see that the boards may at the weekends be reading the FT and all sort of big big articles about how AI is going to transform personal finance, etc.
• 6:52
  SPEAKER_02: And then they come in and they say, I want a strategy for our firm.
• 6:55
  SPEAKER_02: And then the um more junior end of the firms tend to be quite excited about change, but there's that layer of maybe middle management, which is quite resistant, that's done everything the same way for a long time.
• 7:04
  SPEAKER_02: Plus, also, you know, to be fair to them, there's this regulatory burden that they have where they've got to do things very properly.
• 7:10
  SPEAKER_02: They're regulated organizations.
• 7:12
  SPEAKER_02: So there's this sort of culture problem, regulation problem.
• 7:16
  SPEAKER_02: But I think now we are really seeing that people need to change.
• 7:19
  SPEAKER_02: And actually, I'm really glad that you pulled out that end-to-end customer journey because we've been doing a huge amount of work in our distribution practice around client experience from you know pre-sales right the way through to maybe offboarding and that whole client life cycle management.
• 7:34
  SPEAKER_02: And we can see that in a in a competitive environment where maybe performance isn't good, client experience can make your business really sticky and can keep clients on board through difficult periods.
• 7:44
  SPEAKER_02: So we're definitely seeing um our clients investing a lot in that at the moment.
• 7:48
  SPEAKER_00: And so I guess the kind of race to be a winner in this environment, you know, it is clearly gonna get increasingly competitive with sort of pressures for on revenues and and kind of costs going up.
• 8:00
  SPEAKER_00: You know, is is it a sort of a race to sort of apply those new technologies and approaches?
• 8:05
  SPEAKER_00: And, you know, does that sort of does that mean more outsourcing, more automation, more um sort of technology at play?
• 8:15
  SPEAKER_02: Yeah, so I think um definitely seeing there be a change in the asset class mix.
• 8:20
  SPEAKER_02: And so people are going uh in general, there's a lot of move into passives or a lot of move into alts uh into alternatives because trying to get um an extra sort of alpha in in those asset classes, and that can create this new burden of how to manage your operations because they tend to be more complex asset classes to administer.
• 8:37
  SPEAKER_02: Um so that that definitely seeing that piece there, and then on the customer side, I think there's a race to be the closest to the customer in a way.
• 8:44
  SPEAKER_02: So um, whether it's uh the the platforms really wanting to hold that customer relationship, or you even see the investment consultants now wanting to do a lot more and kind of push the asset managers backwards in a way.
• 8:55
  SPEAKER_02: So and then the asset managers themselves trying to get closer to the customer.
• 8:59
  SPEAKER_02: So I think everybody's kind of of the view that the closer you can be to that end relationship, that's that's where the business will be sticky.
• 9:07
  SPEAKER_02: So that we're seeing a lot of people focusing on that.
• 9:10
  SPEAKER_01: Yeah, I think that's one of the really interesting pressures is um you know manufacturers trying to move you know upstream to interface with with the client.
• 9:18
  SPEAKER_01: As as you recognize that if you're just going to be downstream as the manufacturing factory, if you like, then it's a scale play.
• 9:26
  SPEAKER_01: Um, you either go big or you go home almost.
• 9:29
  SPEAKER_00: Um of course that's I heard a really good expression I just uh the other day, which was you you don't want to be half pregnant here.
• 9:35
  SPEAKER_00: You know, you want to be either going for scale and going to be a kind of a mega manager, or or you want to be very, very clear about your specific niche.
• 9:44
  SPEAKER_01: Yeah, and I think that um we were talking earlier a little bit about um how to affect change in these organizations.
• 9:50
  SPEAKER_01: And I totally agree that whilst technology is really important, and I think that there is a um an opportunity for firms to collaborate better around technology problems, so come together and solve some of the common technology problems so that they can focus on the value add pieces like running money, like the customer experience.
• 10:10
  SPEAKER_01: Um, but internally, like you say, it's so much less about technology in some ways.
• 10:15
  SPEAKER_01: Because we we've got all the technology available, right?
• 10:17
  SPEAKER_01: It's it's it you can go out and get the technology, and and the the cost of getting that technology is has reduced significantly.
• 10:24
  SPEAKER_01: It's it's about people and it's about um uh attitudes to change and it's about bringing in an environment.
• 10:31
  SPEAKER_01: We've talked a lot in the past with clients about um agile, and that's sort of a double-edged sword because people want to implement agile processes, and that's that's not what it's about.
• 10:41
  SPEAKER_01: It's a it's a way of thinking that allows you to, in particular, test and learn.
• 10:46
  SPEAKER_01: Um and one of the things I think that's interesting is if you start to move into rather these big projects and these big campaigns, that you move to always on sort of continuous testing and learning.
• 10:57
  SPEAKER_01: That's a better environment and that's a much more agile, aligned way to be.
• 11:03
  SPEAKER_01: Um, but the other part about that is um fostering the ability for small teams to affect change in organizations.
• 11:11
  SPEAKER_01: And I think some of the more successful ones perhaps have found that sometimes it's better to green field that, to actually say, let's take a team, let's put it outside the, you know, the the controls and the governance of the of the mothership and allow them to build a new proposition in the in the market if that's if that's what they're trying to do.
• 11:29
  SPEAKER_02: Yeah, we I I just thought to your half-pregnant point I would mention that we um recently ran a data survey about data innovation.
• 11:35
  SPEAKER_02: And one of the interesting findings that came out of that was that the big firms are really investing and are showing some real return on investment now for their innovation.
• 11:43
  SPEAKER_02: And the small firms can be quite nimble and can do that stuff for quite low cost and really targeted.
• 11:49
  SPEAKER_02: But the place which is finding it the hardest is that sort of middle tier of managers, sort of 150 billion to 400 billion.
• 11:55
  SPEAKER_02: That's where people are struggling with scale and with the cost pressures, and and it's those firms I think that are finding it the the hardest to innovate.
• 12:02
  SPEAKER_00: Yeah.
• 12:04
  SPEAKER_00: And so how do we presumably then some some some businesses are getting much more comfortable with that more agile way of thinking and approach?
• 12:14
  SPEAKER_00: Um, but it strikes me that it's not necessarily that kind of broadly adopted.
• 12:19
  SPEAKER_00: So, how can we help marketers, or more broadly in your case, um get comfortable with just trying stuff and and accepting that on occasion things will fail, and actually there are learnings there, and that's just as valuable.
• 12:31
  SPEAKER_02: Yeah, and I think definitely in our industry, people aren't comfortable with that idea of fail fast.
• 12:36
  SPEAKER_02: It's just not it's just not in the appetite of of most people that we work with.
• 12:39
  SPEAKER_02: I think to your point about the agile, we we do a lot of work in our um digital and agile practice led by Kevin O'Shaughnessy around setting up agile teams around value streams.
• 12:49
  SPEAKER_02: So you might have your distribution team, and the idea is to have the value stream change team in an agile way behind that, trying to get concepts to cash really quickly.
• 12:58
  SPEAKER_02: So I think having permanent resources that are working through change on an ongoing basis as opposed to spinning up a project, then those people disappear and then spinning up another project.
• 13:08
  SPEAKER_02: And it's just a slightly different way of working but can um reap big rewards.
• 13:13
  SPEAKER_02: On the flip side, there are lots of people that have implemented Agile from a very narrow tech-led view of right, we're gonna have a scrum team, and sometimes that can just lead to change without any clear requirements and no sort of obvious benefit.
• 13:27
  SPEAKER_02: So I think it's got to be done right, but it can be really good when you get it right.
• 13:32
  SPEAKER_01: And I think firms can learn from startups, you know.
• 13:34
  SPEAKER_01: And um we've seen people like Winton in the past, you know, run um you know incubation programs effectively for startups that specialise in in data management.
• 13:44
  SPEAKER_01: And that's a great way, clearly, for them to identify early stage uh firms that are going to be of of interest and value to them.
• 13:51
  SPEAKER_01: But actually, there's a learning process that as you expose your people in your firm to that methodology and the vibrance and pace of a startup.
• 14:02
  SPEAKER_01: There's there's a sort of a dual benefit to that.
• 14:05
  SPEAKER_01: So I I would definitely like to see more of the bigger firms starting to, you know, I mean, they can run their own incubation programs, they can partner with people, but I think that that would have a massive impact both on their ability to find interesting firms to work with, but to, you know, affect their own teams.
• 14:21
  SPEAKER_00: Yeah, and I wonder to some degree, and let me take an investor's viewpoint, to how to what degree do they really want us as asset managers to be sort of innovating in in this way?
• 14:33
  SPEAKER_00: I mean, do you think actually, to your point, Andrew, they want you to be partnering with people who genuinely have the skill set and ability to swaster and incubate innovation and sort of new technologies and help run right alongside them, um, whilst the asset manager really remains focused on managing money?
• 14:52
  SPEAKER_02: Yeah, and I thought I think when um when we're working with clients on this point, what they're often saying is we meet all these fintechs all the time.
• 15:00
  SPEAKER_02: It's quite hard for us to say this is definitely going to be a benefit to the end client.
• 15:04
  SPEAKER_02: Plus, there's this huge procurement hurdle that we really struggle to get smaller firms over because if we're gonna be the only client or one of two clients, do we really want to take the risk in a core part of our business?
• 15:15
  SPEAKER_02: I think, as you said, we've seen some great success where people have spun something up to the side in the sort of skunk works kind of uh way.
• 15:22
  SPEAKER_02: For the fidelity, personal wealth is a great example of that that's been done really well.
• 15:27
  SPEAKER_02: Um, and then also some kind of internal um, as you said, uh sort of fintech accelerators or or programs.
• 15:34
  SPEAKER_02: I think Schroeder's have a really good one with with Cobalt.
• 15:37
  SPEAKER_02: Um, but really affecting change in core parts of the business, I think it's has still been quite slow.
• 15:41
  SPEAKER_02: So hopefully this is going to be the year of uh a bit more of that excitement coming to market.
• 15:46
  SPEAKER_00: It strikes me that um some of the more kind of progressive companies are looking at those sort of like a twin strategy.
• 15:55
  SPEAKER_00: One to really address the legacy systems and the sort of architecture of what's in place and sort of maybe sort of outdated systems or applications, whilst also on the other hand, maybe in parallel, also investing in new technologies where they do feel like they've you know they've got the confidence it's gonna affect change, you know, customer journey being being a classic one.
• 16:16
  SPEAKER_00: But do you see that?
• 16:17
  SPEAKER_02: Yeah, I think that's exactly right.
• 16:19
  SPEAKER_02: So we've always seen innovation on the investment, um on the investment process, and I think that continues a pace.
• 16:26
  SPEAKER_02: So people are definitely looking at um either fintech solutions to help them gather data quick more quickly or um new ways of assessing bigger groups of data like the growth in alternative data sets.
• 16:36
  SPEAKER_02: So that's always kind of been the case on investments, but now we're really seeing the investment in distribution, and that came out really strongly in our survey that asset managers are now using advanced sort of statistical or machine learning techniques to go after new AUM, and that was something new that we we hadn't seen before.
• 16:52
  SPEAKER_02: So an exciting change on that.
• 16:54
  SPEAKER_02: And I think that's all around the theme as well of distribution becoming the more important part of an asset management business than than the investment team, which is a big, big change, and also coincides with a rise of new CEOs from a distribution background as opposed to from an investment background.
• 17:09
  SPEAKER_02: So it's an interesting flip for the industry.
• 17:11
  SPEAKER_01: Yeah, interesting.
• 17:12
  SPEAKER_01: Yeah, I and I guess that leads to a skills gap sometimes because I think that you've got the folk who are understanding um the attraction of using advanced techniques.
• 17:26
  SPEAKER_01: But we do see a gap in our work between there's no lack of understanding of what the tools can do and how to use the technology in one sense, but implementing it into the kind of real world.
• 17:35
  SPEAKER_01: And especially you know, again, we focus on on the marketing mix, but uh you know, the gap between what those technologies can do and getting them sort of real world into the marketing machinery.
• 17:48
  SPEAKER_01: I think there's quite a skills gap there.
• 17:50
  SPEAKER_01: And I again, okay, um you can get outside help to help with that, but again, they need to look at ways, firms need to look at ways of bringing those skills, you know, in into their teams.
• 18:00
  SPEAKER_02: Yeah, and then that's back to the culture point because the best data scientists or the the sort of best people at at technology don't necessarily want to come and work in in our industry, unfortunately.
• 18:11
  SPEAKER_02: Um and so I think that comes back to us having to have a bit of a a change in how we view those kind of um skills and how we bring them in and make them feel like these are important problems to be solved.
• 18:21
  SPEAKER_02: Trevor Burrus, Jr.
• 18:21
  SPEAKER_01: And and a boldness of decision making that that sits behind that.
• 18:24
  SPEAKER_01: Because I think I remember sitting in a conference, you know, it's probably only two or three years ago, and talking about the time involved in moving from the decision to, for example, implement a marketing automation system.
• 18:35
  SPEAKER_01: So, you know, lead scoring, lead generating um model based on technology.
• 18:40
  SPEAKER_01: And the general consensus was that back then, and maybe it's changed now, was two years to go from let's do this, go through all the approval processes and procurement, build the technology and implement.
• 18:51
  SPEAKER_01: And you know, my view is you you can't take two years to do those sorts of programs anymore because if anything we can learn from the world around us is that the the the pace of change is accelerating and and two years is too long to implement that.
• 19:06
  SPEAKER_01: So and a lot of that just comes down to those internal decision-making mechanisms that we will have to make bold decisions to implement things and to attract the sort of people that are going to want to come and be a part of that, you know, that environment.
• 19:20
  SPEAKER_02: Yeah, and I think Twink was exactly right when she said what people are doing at the moment is focusing on cleaning up their operating models because so often, if you want to add in something WYSI on the side, you need to have your data clean and ready to go in a standardized format to be able to load into these other solutions.
• 19:37
  SPEAKER_02: So right now I would say the big thematic is people moving to much simpler organization models with much simpler technology so that they can then uh feed downstream systems in more um with with much more simpler con connections.
• 19:54
  SPEAKER_02: And uh if you're if you were working in a sort of old old style best of breed model where every desk has a different tool and it's much harder to put that data into some some system and do something on top of it.
• 20:05
  SPEAKER_02: So I think we're seeing definitely investment on the simplifying model right now.
• 20:11
  SPEAKER_00: How how does that bear out, I guess, in the world where we anticipate consolidation?
• 20:15
  SPEAKER_00: And so I think um inevitably the systems get complicated when they get sort of put together.
• 20:22
  SPEAKER_00: And I think that's where some major players are today.
• 20:25
  SPEAKER_00: But I guess going forward the those kind of problems are going to continue to exist.
• 20:29
  SPEAKER_02: Yeah, absolutely.
• 20:30
  SPEAKER_02: And that's why I think you know we've we've done work with clients who have been saying either we're about to acquire something or we think we're an acquisition target and we want to have a really good operating model so that our operating model wins in the in the way in that decision when you put it together.
• 20:45
  SPEAKER_02: Um so yeah, I think getting that right at the outset can really give you a great platform to do more interesting stuff down the road.
• 20:53
  SPEAKER_01: But it's and it's the rise of the importance of the marketing technology stack as well.
• 20:57
  SPEAKER_01: So typically you've had a CTO who's run your firm systems, your trading platforms, and kept it all safe.
• 21:03
  SPEAKER_01: Quite often the marketing teams have worked quite outside of that governance and control because they've worked with everything that's on the internet.
• 21:09
  SPEAKER_01: And quite often there's been an absolute divide that says if it's outside the firewall, IT don't worry too much about it.
• 21:14
  SPEAKER_01: Marketing teams can go off and do all the but the simple fact is now that the complexity and the security involved in that means that actually your CTO or maybe your CIO or maybe your CMO now needs to have a really strong marketing technology stack that understands how the data will flow through the sales funnel or through the servicing funnel.
• 21:35
  SPEAKER_01: Trevor Burrus, Jr.
• 21:36
  SPEAKER_02: I think that's exactly right.
• 21:37
  SPEAKER_02: And again, back to the roles.
• 21:38
  SPEAKER_02: It's sort of interesting to see I think COO for distribution or COO for investments, these are sort of new roles that we see because managing that stack and that operating model is getting much more complicated.
• 21:49
  SPEAKER_00: And so in that world, I guess the technology is going to be the differentiator or the data that sort of is then sort of comes through from the stack that you have in place.
• 22:00
  SPEAKER_00: So presumably data is going to be the thing that well, regulation as well as data is going to be the thing that really drives these businesses to innovate.
• 22:10
  SPEAKER_02: Yeah, I hope so.
• 22:11
  SPEAKER_02: The phrase that we use is becoming an insight-driven organization.
• 22:15
  SPEAKER_02: So knowing, for example, I can go after this client and then they'll want this product based on my data analysis, or I'm going to use this particular type of data analysis in order to make my investment decision.
• 22:26
  SPEAKER_02: And even as you say, look at market abuse or compliance points within organizations.
• 22:33
  SPEAKER_02: So I think data is just going to drive absolutely everything.
• 22:36
  SPEAKER_02: And I think we need to move away from the idea of having investments data over here and distribution data over here, and never the two shall meet.
• 22:44
  SPEAKER_02: I think much more so now people need to join that data together in order to really get the benefit of it.
• 22:49
  SPEAKER_02: And that's pushing people much more in the direction of solutions like cloud for multiple data sources and then doing much more interesting stuff on top with visualization.
• 22:58
  SPEAKER_02: Because if you can put that in the hands of the users, you can really start to do interesting things.
• 23:04
  SPEAKER_02: We we worked with a client um like a few years ago, and for every function within their um within their business, they designed a digital dashboard and they had them on huge TVs in the office, so the COO dashboard would have what was going X that day or how many breaks they had, and then the compliance dashboard would have uh whatever the compliance guy needed.
• 23:24
  SPEAKER_02: And um everybody could see them on the floors and really coalesce around those stories so everyone's really understood what was going on.
• 23:30
  SPEAKER_02: Um I think that sort of stuff as well.
• 23:32
  SPEAKER_02: It doesn't necessarily have to be next level serious um machine learning, but just actually looking at the data in a visual way that highlights what's interesting.
• 23:43
  SPEAKER_01: And the winners will be the ones who know what to do with the data.
• 23:46
  SPEAKER_01: Because you're right, it's it's all about being insight-led.
• 23:48
  SPEAKER_01: And actually, most marketers we work with now are kind of drowning in data.
• 23:53
  SPEAKER_01: There's no actual shortage of data being generated across their web or distribution or other parts of their business.
• 24:00
  SPEAKER_01: It's the ability to bring that into something that can generate insight and then action, well, actionable insight, maybe that's the point.
• 24:07
  SPEAKER_01: That it's actually something you can do something about in effect.
• 24:10
  SPEAKER_01: So we talk about, you know, we've we've got our uh benchmarking service, and one of the measures is home paid traffic.
• 24:15
  SPEAKER_01: And that's kind of useful, but at the same time, it's a vanity measure that says, well, but what is it that you're going to do to affect change to that metric?
• 24:23
  SPEAKER_01: So whereas something about a, you know, a uh a factor that affects your lead score that means that there's a a better sales qualified lead ready to be picked up, then that's that's actionable insight that can be um so there's no no shortage of data, but the firms that win are the ones who know what to what to do with it, really.
• 24:40
  SPEAKER_02: I think the other interesting angle is um what are clients actually asking for?
• 24:44
  SPEAKER_02: Because um I'm always really interested in um application-level integration.
• 24:49
  SPEAKER_02: So I love automation on the back end, so not having to have manual keying and that kind of thing.
• 24:54
  SPEAKER_02: And so as a result, I'm always evangelizing about APIs.
• 24:57
  SPEAKER_02: But then when I talk to institutional asset managers, they're saying asset owners don't really ask us for APIs, only about 5% if that.
• 25:05
  SPEAKER_02: Um but what they're really asking us for is that they want ESG data through the whole life cycle, from marketing through to investments.
• 25:12
  SPEAKER_02: And so I think innovation that's being demanded by the clients is probably going to be the one that takes hold quickest, even if I'm still evangelizing for APIs.
• 25:22
  SPEAKER_00: Do you to the comment you made right at the top, Andrew, about we see maybe more innovation, more fintech and wealth management, why do we think that?
• 25:31
  SPEAKER_00: Is that because you feel that maybe they're close to the client in some ways?
• 25:34
  SPEAKER_00: So that they have a greater sense as to how to evolve their proposition, be really focused about the value that that brings, that'd be fair?
• 25:42
  SPEAKER_02: Yeah, I think we um have seen innovation from new, as you say, robo advisors um coming in.
• 25:48
  SPEAKER_02: In the traditional wealth firms, I'm not sure that that's been quite the case.
• 25:52
  SPEAKER_02: And actually, when we talk to them, um they're saying that's not really what our clients want.
• 25:56
  SPEAKER_02: Again, back to that sort of client-led innovation.
• 25:59
  SPEAKER_02: I think clients, again, they they like to be able to see their data and to log on and um to really, as you also mentioned, that high degree of personalization so they can have their goals that say my yacht or some other school fees or whatever it might be.
• 26:13
  SPEAKER_02: They they like that kind of um angle.
• 26:16
  SPEAKER_02: Um, but no, I'm not seeing very many wealth firms really thinking that the robos are gonna eat their lunch.
• 26:22
  SPEAKER_01: No, I think exactly.
• 26:23
  SPEAKER_01: I think there's two things.
• 26:24
  SPEAKER_01: One is it's just more visible in the wealth front.
• 26:26
  SPEAKER_01: So a lot of the stuff that we might see as innovation and asset management probably isn't terribly visible.
• 26:30
  SPEAKER_01: Uh it maybe I'll be connecting up systems in the back end and improving some of those processes and payment systems and the and the like.
• 26:38
  SPEAKER_01: With wealth, we see those robo advisors because they're out there pushing for and and it's the it's closer to the end client.
• 26:45
  SPEAKER_01: And therefore, the demand from the client is much more evident and real.
• 26:49
  SPEAKER_01: So we know that in an institutional market, you just don't feel that same pressure of change, you know.
• 26:55
  SPEAKER_01: Whereas if you're trying to serve the wealth market, there is demand, I think, for a better client experience, depending on the the type of wealth management firm it is.
• 27:05
  SPEAKER_01: But if it's if it's new money just looking for advice and knowledge about where to place money, then I think it all comes down to that experience.
• 27:11
  SPEAKER_01: And so some of the new providers can provide a much better experience than some of the incumbents.
• 27:17
  SPEAKER_01: Um I think it's it's just more visible and they're probably under more pressure to react more quickly, whereas for better or for worse, a lot of the asset management firms probably don't feel quite that same immediate pressure.
• 27:31
  SPEAKER_00: So when we start to sort of look ahead or or even just point to sort of really where great best practice is, are there some sort of obvious examples, I guess for our listeners who are sort of thinking, how do I start to think about innovating kind of our practices within my team or or or to challenge the broader business in terms of um how we're evolving our proposition?
• 27:55
  SPEAKER_00: Are there are there places they can look or go to or or some examples to mention?
• 28:00
  SPEAKER_02: Yeah, I think back to that data point, the the best in-class examples are the ones that are really focusing on their data operating models so that they have really good infrastructure, be that in the cloud or on their own servers, but cloud obviously gives a lot of flexibility.
• 28:14
  SPEAKER_02: They have really good data masters and then they're bringing in data that's dynamic in interesting ways, which they can bring together different types of data.
• 28:22
  SPEAKER_02: You know, one problem that asset managers often have, which is almost unbelievable, is that they can't tell you how much a client holds because gathering that data from the platforms and the TAs is just very complicated.
• 28:34
  SPEAKER_02: And so we work with clients a lot on that that type of problem.
• 28:37
  SPEAKER_02: Um so I think data is gonna be the fundamental.
• 28:41
  SPEAKER_02: But then once you've got that in place, I think there's so many exciting things that that are happening in the industry that either trials just now or or even starting to properly innovate on change processes.
• 28:52
  SPEAKER_02: Um, and I think AI is going to be really exciting.
• 28:55
  SPEAKER_02: And as you um said it right at the outset, um the applications of AI within investment management are so broad because we've been seeing people um experiment with it for investment commentary writing, for example, using natural language generation, um, or then right the way through to using um machine learning on alternative data sets to do different investment insights.
• 29:18
  SPEAKER_02: So, right across the client journey, you can really see exciting uses of these technologies.
• 29:24
  SPEAKER_02: So I think that's where I'm I'm hoping for some big leaps forward.
• 29:28
  SPEAKER_01: I think some of those um one of my mantras this year has been all about um focusing on setting up your operational aspects first.
• 29:37
  SPEAKER_01: Because if you want to do the fancy things, as you've said, Liz, if you want to do the fancy stuff, you need to get your your your base right, whether that's data or operating models or marketing technology stacks.
• 29:46
  SPEAKER_01: I think as I said at the outset, the the stuff that I think is also interesting is creating those internal environments to allow innovation to flourish within your own teams.
• 29:56
  SPEAKER_01: Um I think, you know, there's we've we've talked a little bit about Agile.
• 30:00
  SPEAKER_01: There are um I I think a great approach to short and quick sprints is if you read up on the Google Ventures five-day sprint model.
• 30:09
  SPEAKER_01: And I know that lots of people know about that, but that's a great, incredibly well-documented way of getting your teams to understand that kind of quick prototyping to solve a problem.
• 30:19
  SPEAKER_01: And that's if you adopt that as a methodology, then that that can be applied to how you do work.
• 30:24
  SPEAKER_01: That's a great step forward.
• 30:25
  SPEAKER_01: And there's entrepreneur nation, these sorts of places that start to talk about how to develop a culture of of of innovation within the firm.
• 30:33
  SPEAKER_01: Um, and I think that that will become increasingly a retention play.
• 30:38
  SPEAKER_01: Like if you want great people to come into your firm, whether that's out of grad levels, um, you know, you're going to have to offer those sorts of environments.
• 30:48
  SPEAKER_01: Because as you said earlier on, if if you want the smart people, whether that's data or whatever it is, they want to be doing interesting work.
• 30:54
  SPEAKER_01: Yeah, you know, and and and see the results really quickly and moving into a you know a five-day sprint culture, that would be a pretty good way to start.
• 31:03
  SPEAKER_02: Yeah, I think as well, there's a big skills gap.
• 31:05
  SPEAKER_02: So training your internal staff, you don't it's not even necessarily about hiring them, but actually improving the skills of your internal staff to know what innovation is out there can have a have a huge impact.
• 31:16
  SPEAKER_02: And then also building into your performance um process because quite often we say, Oh, well, my team won't innovate.
• 31:22
  SPEAKER_02: And you ask, well, is it built into their performance criteria and it's not.
• 31:26
  SPEAKER_02: So I think changing the attitudes around some of that stuff can have a big difference.
• 31:30
  SPEAKER_00: I think you're right.
• 31:31
  SPEAKER_00: You know, we we talked quite a bit on these podcasts around actually where we're competing as asset managers is um not necessarily in obvious areas, and one of them being in in attracting and retaining talent.
• 31:43
  SPEAKER_00: And so we have to have these environments and cultures um that are continue evolving and then bringing in the smartest talent and then for them to stay as well, to looking after them.
• 31:56
  SPEAKER_00: Um thank you guys.
• 31:57
  SPEAKER_00: I feel like there's maybe just as a little wrap-up comment that I might tease out of you at the end here.
• 32:03
  SPEAKER_00: Again, just thinking back to kind of marketers.
• 32:06
  SPEAKER_00: And I'm conscious that in this world of, as we've talked about, potential consolidation, fee pressure, rising costs, you know, there's obviously this opportunity which we haven't really talked about, which is, you know, everybody we're in an environment where there's the opportunity for rising assets as well, for some of the winners that we've been talking about.
• 32:25
  SPEAKER_00: Um and it just strikes me that uh you know the marketing role um is increasingly prominent and prevalent in order to help achieve that and be a winner, both in terms of helping businesses um articulate the value for money that they represent in this competitive world and why they should pay their fees, but also in terms of brand as well.
• 32:48
  SPEAKER_00: You know, if we're going to be this, if we're gonna be this business that operates based on uh you know, sort of scale and efficiencies and um you know cost management, you know, we need to make sure that people want to come to us based on our sort of brand prominence as well.
• 33:03
  SPEAKER_00: Um so I guess I just sort of had some wider thoughts there on on from for marketers in this um sort of changing environment.
• 33:10
  SPEAKER_00: And whether you had anything else to add on that?
• 33:13
  SPEAKER_01: Well, it's interesting.
• 33:14
  SPEAKER_01: I mean, I guess a lot of the firms we talk to at the moment are are recognizing the importance of brand.
• 33:20
  SPEAKER_01: You know, and as they feel under pressure and they're deciding how they want to be in the market, it keeps coming back to them being able to explain their story that that sits behind their brand.
• 33:30
  SPEAKER_01: And I think that something like innovation is just yet another touch point, if you like, of your brand experience.
• 33:35
  SPEAKER_01: That it needs to if if you're putting yourself out there as a forward-thinking, you know, um uh fast-moving firm, and yet on the innovation front you lag behind.
• 33:46
  SPEAKER_01: So I think it's it's just another expression of brand, um, achieving those kind of innovations that you want to deliver.
• 33:54
  SPEAKER_02: Yeah, so I mean, it's definitely not my specialist topic, but um generally speaking, we're we always say that firms are moving towards being much more distribution-led.
• 34:03
  SPEAKER_02: So it it's no longer just product-led one specific product, but more what's the solution for the client and how how is that flowing through your whole distribution cycle and how you're pushing those messages out into the market, which is of course uh linked linked to brand.
• 34:18
  SPEAKER_02: So yeah, I think that is definitely the the theme.
• 34:21
  SPEAKER_00: Fantastic.
• 34:22
  SPEAKER_00: Well, thank you both Livs and Andrew for taking your time today.
• 34:25
  SPEAKER_00: It's been a great discussion, really appreciated your time.
• 34:28
  SPEAKER_02: It's a pleasure.