Asset Management in the fintech era: trends and news from the community

In the midst of the digital revolution, it is necessary not to lose sight of how the asset management sector, closely linked to the banking sector, is evolving, and how it is involved in a process of disruption. It is impossible to pretend nothing is changing so we decided to go one step further and organize an evening on this topic inviting three startups from our community that will teach us some new investment strategies for different target investors. They are Euclidea, Moneyfarm and Gimme5.

The appointment is on June 5, in our headquarters in Copernico Isola for S32, (via Sassetti 32 – Milan).

Sign up here and follow the live event on our Twitter and Instagram accounts (@fintechdistrict) with the hashtag #talkingheadsFD

Before going into what the individual startups will talk about during the in the evening, let’s see what their point of view is with regard to the current growth of asset management and the challenges the sector will have to face in the coming months.

Luca Valaguzza, Founder and Chief Product Officer of Euclidea, confirms the growth has occurred, “after a difficult end of 2018 due to the negative markets” and observes that in Italy the most important challenges “are played on two irreversible trends and these will substantially change the industry and services that will benefit savers: the entry of digital interaction for the end customer and cost transparency, through the introduction of MIFID2”.

Sebastiano Picone, Business Development Manager at Moneyfarm, also talks about MIFID2. Compliance with this regulation “will be an important test bed for financial intermediaries, since it will have an impact on the customer service model and the distribution model of products – explains Picone – Moreover, the change that intermediaries will have to face in the current context of pressure on margins due to the increasing competition on the costs of investment products will not be a trivial one”. As for the growth of the sector, Moneyfarm speaks of a slight slowdown in the recent past “but it remains sustainable thanks to the enormous growth recorded from 2012 to the present”.

Iacopo Massei, Business Development Manager at Gimme5, explains that digitization “should not be seen as a threat to the asset management sector but as a plurality of opportunities to be seized. Technology allows us to be closer to the customer, smarter in the use of leaner data thanks to the optimization and automation of operational processes, faster in the implementation of ideas, real-time reporting and especially in the onboarding of the customer”.

In the face of the current disruption, the banking sector, which has always been an ally of asset management, is reacting with strong investments in fintech or with partnerships that exploit the strengths of the latter: lean-innovative-open-customer-oriented. Gimme5 is part of the second example, focusing on the collaboration between the Bank and Asset Manager, creating win-win situations.

On June 5 there will be an opportunity to deepen the point of view of the three startups protagonists, starting with the new investment strategies that will be illustrated to the public. Euclidea will talk about “Wealth tech independent”, a term that has become the pay off of the company as it represents it so strongly “In these three words there is our response to the changes that will affect asset management in the coming years – explains Valaguzza – Technology is essential to offer a different service from the past, it must bring both innovation and disruption in a sector that lives on income and must innovate. Independence is essential to offer services and products in the sole interest of the end customer. This is what we, as Euclidea, are proposing”.

Given that the challenges introduced by regulation and cost competition are strongly intertwined with the digital distribution of services and investment solutions, Moneyfarm has chosen to address this issue. “In a phase of the transformation of the industry – explains Picone – the distribution model is one of the elements that will change most to allow the sector to remain economically virtuous”.

Massei will talk on the other hand about small investors. Gimme5 is in fact a startup that, in front of a system that is currently not inclusive, wants “to make savings shareable and encourage new generations to do so, giving useful tools for this and, focusing for example on automatisms which allow you to link habits to saving, so as to encourage the creation of a heritage over time.

Massei will illustrate the dual strategy of Gimme5, which focuses on both the banking system and the end user. “Through an already predefined product, we allow banks to diversify the source of their revenues and to reach a new target of customers – explains Massei – and at the same time we meet the end user who is unfamiliar with the investments but already knows how to save”.

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Distribute mutual funds through the blockchain. Gimme5’s Word!

A come A will distribute mutual funds in Italy through the blockchain. This feature has been tested on Gimme5, the company’s app to invest and save starting from 5 euros; the first saving app interested in exploiting the blockchain.

Thanks to this new feature, Gimme5 will be able to carry out subscription and redemption transactions of mutual fund units and related payments in real time using smart contracts based on the blockchain.

AcomeA carried out the test through Fundsquare’s FundsDLT platform, based on blockchain technology, and through Fabrick‘s Open Banking platform. The positive result obtained shows that it is possible to simplify as much as possible the execution of transactions and that the blockchain is able to bring efficiency and cost-effectiveness in the processing of orders on investment funds.

To find out more, we interviewed the real protagonists of this project, two members of the Gimme5 team who work behind the scenes and are not often asked about the results achieved: the Lead Developer and the Gimme5 Data Manager. Fabio Arlati and Giuseppe Codazzi, tell us about this historic result and the first subscription of mutual fund shares in Italy through blockchain technology.

What exactly is the test you carried out?

The test consisted of the reception, valorization and registration of transactions for the purchase of fund shares exploiting the potential of FundsDLT and Fabrick. This allowed Gimme5 to test a cheaper, faster, more efficient, and, thanks to the very nature of Smart Contracts, certified process.

What does it mean for the fintech sector?

Apart from the obvious technological and innovation aspects, the most important achievement is the collaboration with Fundsquare and Fabrick. With the success obtained, we have demonstrated that fintech can be a concrete sector with strong cooperation between the parties, benefitting the industry itself and its customers.

In Italy, our test it is the first one, but in Europe, several European groups operating in the asset management sector have already conducted similar experiments with FundsDLT; however, it is the first time in Europe that more players in the fintech panorama have been involved.

What benefits will it bring to users?

As this is the first test, the timing of approval and change will be long because it is necessary to innovate also in terms of process management. The first advantage will certainly be the level of usability of the service. The user will be able to enjoy an alternative and more efficient purchase method, which can be completed in a shorter time period. Furthermore, there is the argument of costs: Gimme5 has already cancelled or reduced all costs to a minimum, including operational costs. This lighter infrastructure will further increase the benefits for our customers.

How will your business change after this result?

Undoubtedly, the use of such a model can guarantee Gimme5 to exploit an increasingly efficient infrastructure, both in terms of process management, times, and costs. Moreover, the fact that all three players involved want to be platforms speaks volumes in terms of future objectives. Gimme5 has always been in favour of opening up to new partners and also to new markets: we have international aspirations.

What were the strengths of the collaboration with the other two platforms? And the most critical aspects?

The strengths are certainly linked to cooperation. Each one of us brings the best to the entire supply chain, making the process more efficient in all the aspects. In fintech, there is a real opportunity to work as a team and I believe that this has already been an excellent starting point.

There were no particularly delicate moments. Of course, there was a lot of attention for the timing. In projects of this kind, with three players involved, each one rightly had its own objectives and priorities. It all started almost a year ago, we have come a long way since then and will certainly continue to do so.

Are you looking for any information about Gimme5? Read the interview with product manager Flavio Talarico

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