The Rise of Digital Platforms for Investment and Wealth Management

The past several years have seen an explosion in digital transformation in the global wealth management industry, and nowhere more so than with the rise of digital execution technologies and platforms. Remote working practices that have emerged since 2020 have supercharged the thrust towards ‘smart’ access to financial services of all types and fast-forwarded the wealth management industry’s business models well beyond where they were expected to be today. At the core of these developments is the drive to provide seamless investment execution aligned with a far more personalised and relevant wealth management offering, far better portfolio information and data from custodians, and more seamless reporting. At the Hubbis Digital Wealth Forum in Singapore our chosen experts delved into the evolution of advanced digital execution technologies and platforms as the wealth industry in Asia transforms itself and future focuses its business.

Chair: Julien Le Noble, CEO, GTN Asia Financial Services

The Panel:

• Philipp Piaz, Partner, Finaport
• Steve Knabl, Chief Operating Officer & Managing Partner, Swiss-Asia Financial Services
• Tuck Meng Yee, Partner and Founder, JRT Partners

Key Observations & Insights

Out with the old and in with the new

A guest highlighted how the traditional world of execution and trading by telephone, by email, and with the follow-through largely manual and reporting coming simply from the custodian bank that the client is still very prevalent. “It is actually pretty archaic, but not many wealth managers have really tried to evolve from it, although the larger ones are trying out external platforms,” he explained. “On the other side, the hedge fund industry or the fund industry are way more streamlined. You have third party execution, third party seller, all reporting is automated, reconciliation is all done on a daily basis, it is seamless. The wealth industry needs to embrace and adopt this type of technology and third party technology and connectivity.”

Overcoming the multi-custodian hurdles

Another speaker highlighted the challenges of working across many different custodians, each with their own interface for trades. “Some have codes to key in, some have a button to click, but for sure, of 10 banks there will be 10 different interfaces for us to key in a trade,” he explained. “That is very time consuming, it is open to errors, it is not easy to do in a timely manner in terms of login, especially as some banks require two factor authentication.”

Accordingly, he said the challenge is to overcome the connectivity and interface issues, to use a single interface for trades to be sent then seamlessly to different institutions and custodians, that would already be a very, very big step. “I believe nobody really has that, where you can basically deal with multiple custodians, executions and banks, the same way you would deal with a bank, if you were their one and only counterpart,” he cautioned. The reality is most EAMs and others have to deal with multiple custodians. That is really one of the main hindrances right now.”

The needs are many – simplicity and diversity are high priorities

Another guest highlighted the need to make their lives as investors much easier and simpler, and any advances are welcome, especially around what he termed ‘democratising more of the simpler capabilities’. He said another key requirement they have is more private assets, so that the digital platforms  that allow access to FX, bonds, and equities, increasingly offer access to what is an embryonic secondary market capability for private assets.  

Another expert pointed to the need for smart, timely and accurate reporting. He said scale is also important, hence systems integration and technological coordination internally as vital for efficiency and profitability.

“We need to be able to integrate systems, one system, not ten different systems, not ten different models, to the different venues that we're using.  And I think the winners would also be these venues or these banks or these custodians that will embrace open architecture,” he told delegates. “If as a firm you will be able to provide that open architecture and the access to different banks and the work across those different banks and have a reporting system at the backend, that makes real sense. First you've got a winning product, and secondly, you have the scale to have the right people solving a lot of problems.”

A fellow panellist concurred, noting that the connectivity or integration which had been mentioned is indeed crucial.

“For the life of me, I don't see why there cannot be a certain standard [applied] that that will make life so much easier,” he concluded. “The wish from our side as asset managers is speed, accuracy and the integration and of certain less liquid assets, although not private assets by the way that would be going too far. In short, we want a broader canvas of assets to show the client, and also to enhance views in terms of risk assessment, in terms of overall valuation, and reporting; that would all be very welcome.”

Another expert added that they want a deeper dive on the reporting of their assets and exposures from their banks. “The transparency, real transparency for what we want is still missing, and unfortunately, if you go to most platforms, they force you to either pay up for it, or they say they cannot help from a regulatory point of view. For private assets and LPs, for example, we actually get a lot of our best software solutions from venture capitalists.

There are modest glimmers of hope from the banks, even if their objectives are actually mostly self-serving and their technology and attitudes outmoded

A guest reported that there is one bank that they work with in Singapore that has offered them access to one of these tools, but said the objective was not necessarily to make it faster or better for them as a customer, but to outsource the bank's job to the EAM.

He explained: “They are really saying you EAMs you don’t need to call us anymore for this or that, you just print everything you want, you execute everything you want. Technically, the system allows onboarding of different banks and custodians and executions, but clearly it is only the ‘lite’ version that is being offered by that bank just to manage the book of that bank. If at some point you wish to integrate others, you probably have to change the system altogether.”

He concluded that the banks do therefore see the need for integrating their systems with the asset managers using platforms, with a view to facilitate transparency, speed, efficiency, and simplicity for the EAMs to serve their clients better.  Having said that, I think there is no general trend that I see from other banks doing the same yet, but I assume as the banks want to make it more efficient for themselves, it is really a matter of time before they give EAMs more of these platforms.”

Agreeing, another expert said that a lot of the banks are developing their own technology, but most are based on old technology and are very basic. “There are no super enhancements, no nice reports that can be produced, speed is modest, but the trends in digital technology and the blockchain are towards everything becoming super seamless and ever faster. Whereas even today, it takes us, honestly, about 10 days to connect to a custodian and to be able to complete the whole process.”

Another guest agreed, adding: Using a telecoms analogy, the banks are still 3G, whereas the real world is moving beyond 4G to 5G.” And he said this was effectively paving the way for the traditional centralised finance, or CeFi, platform to be disrupted and eventually replaced by the Decentralised Finance or DeFI.

A short note on GTN Asia Financial Services and their CEO

This panel discussion was moderated by Julien Le Noble, CEO of GTN Asia Financial Services, which is part of GTN Group, a Fintech driven financial services provider offering best in class execution, custody and post trade solutions.

Their institutional buy-side and sell-side clients use GTN to access global trading and investment opportunities across asset classes and geographies. They boast an award-winning front-to-back platform built on a cutting-edge architecture delivering scalable and future proof technology.

GTN Asia Financial Services is headquartered in Singapore and regulated by the Monetary Authority of Singapore (MAS) as a Capital Markets Services license holder. GTN Asia is a joint venture between Global Market Access Network (DIFC) Limited (a fintech leader based in Dubai) and SBI Group (Japan’s largest online securities firm).

GTN is relatively new in the Asia region and is providing global trading solutions as well as investment management solutions. The firm reports its clients work with GTN for two core reasons - they want to have access to markets across products and across asset classes in an efficient way, and they also want to manage their portfolio and their clients’ portfolio through the digital tools that GTN offers. The platform is designed to provide customers with efficient and cost-effective execution, reporting, settlement and custody, and help with building portfolios, rebalancing and optimising the portfolios.

Julien Le Noble has over 20 years experience in financial services and FinTech across the US, Europe and Asia with a track record in delivering on growth and turn around strategies in rapidly evolving ecosystems and market environments. Combining his experience of setting up, expanding and managing international businesses with innovative financial technologies, Julien was appointed CEO of GTN in Asia Pacific in August 2021 to lead the firm’s expansion in the region.

Prior to joining GTN Asia as CEO, Julien had co-founded Smartfolios in 2015 which was acquired by Finantix in February 2018, itself merged into InvestCloud in February 2021, a leading and innovative digital financial technology and artificial intelligence platform, used by hundreds of financial institutions and wealth managers worldwide.

Julien was also Head of APAC and Senior MD at CME Group in 2011-2014, and before that CEO of Newedge in Japan 2006-2011, MD of Newedge in Singapore 2002-2006 and launched Boursorama (now known as Selftrade) in the UK in 2000 after starting his career with Groupe Societe General in Chicago, USA