In recent months, innovative distribution models have
been adopted by a number of different platforms. Disruptive customer experience
providers like Nutmeg, Wealthfront and FutureAdvisor, to name a few, have
introduced interactive ways of addressing the needs of end investors.
According to the results of the EY Fintech index 1 published on 22 January 2016,
this wave of innovation in financial services is here to stay.
“The Q4 2015 EY market survey ranks different categories of
FinTech products in terms of how widely used they are. Payment services (17.6%)
figure at the top, followed closely by savings and investments (16.7%). In the
latter category, online stock brokers and spread betting were most common.
Online budgeting and planning, online investments, equity and rewards crowd
funding and peer-to-peer or marketplace lending also figured.”
“The market survey also found that higher-income individuals are
some of the most economically valuable customers for banks and insurers:
FinTech use is highest among consumers with incomes greater than US$
150,000 (44.1%).”
BNP Paribas Securities Services has embraced the data management challenge by encouraging a co-creative approach with its partner clients. When it comes to digital initiatives, BNP Paribas Securities
Services actively engages with its clients in the search for disruptive
solutions to new problems. This “co-creative” approach positions the client at
the centre of the process.
The client’s involvement ensures that market trends
impacting the client’s business model are taken into account; that the client’s
expectations are a constant priority; and the process is transparent and
efficient.
Business hackathon
In October 2015, BNP Paribas Securities Services organised a “business hackathon” in London, in collaboration with EY.Actors of the asset management value chain, ranging from distributors to institutional clients and FinTech companies, gathered for two days to challenge the main trends and assumptions surrounding data management. In addition, leaders in the distribution space were present, and provided analysis on the impact of data management on distribution.
Participants were called on to design the value proposition and business model pillars of a “data platform of the future” in a series of workshops.
AXA IM really enjoy the possibility of participating in the hackathon organised by BNP Paribas Securities Services. It was very motivating to exchange on all the topics the industry is looking at, like digital solutions and the distribution platforms of the future. Being with peers for over 2 days and meeting start- ups is very powerful. This is a first step towards moving together in the same direction: clients and providers. We definitely appreciate the cooperative spirit of this kind of event
Joseph Pinto, Global Chief Operating Officer, AXA IM
By addressing the key challenges of the stakeholders in the
value chain – end client, distributor and asset manager – participants
co-designed two types of platform: first, an investment and portfolio
management platform for the end investor, based on a Direct-to-consumer (DTC)
strategy; and secondly, a data consolidation and analytics platform,
which can apply throughout the value chain.
Digital transformation is fully embraced at BNP Paribas Securities Services – with clients at the centre. Leveraging on its key position in asset servicing, the Bank
is cooperating with major actors throughout the value chain to develop and test
prototypes. It calls on its partner clients for for feedback and
recommendations, ensuring a continuous innovation cycle.
As an example, BNP Paribas Securities Services has deployed
an analytics tool that allows fund managers to analyse their performance
relative to the rest of the market. The web portal provides a powerful way to
compute data such as fund performance, net cash balance, the number of
transactions, and total holdings with various level of aggregation. Information
can be fine-tuned by the clients thanks to modern and easy-to-use widgets.A design-based, collaborative approach promotes agility and creativity
Data and customer knowledge within BNP Paribas Securities
Services will enhance market benchmarks and predictive analytical tools. The
Bank launched the DNA reporting through a Google-style internet portal that
offers direct, customised information to Transaction Agent customers. The
search engine and data visualisation modules, among other features, make DNA
for Distribution extremely user friendly – and useful in focusing on what
information is important.
Key success factors
According to the EY global funds distribution review, a
successful platform distribution strategy will require an assertive and
strategic use of social media; a commitment to brand identity; a
comprehensive investor education program; and a high degree of personalisation
and focus on client experience.
These drivers will help address the key challenges of
product differentiation, and further build customer relationships.
[1] EY’s FinTech Adoption Index
attempts to capture the extent of adoption of FinTech by digitally active
consumers. The index draws upon a survey of 10,131 digitally active consumers
undertaken from 1 September 2015 to 6 October 2015. Survey respondents were
located in Australia, Canada, Hong Kong, Singapore, the United Kingdom and the
United States. FinTech users were defined as survey respondents who indicated
they “used two or more FinTech products in the past six months”