9SEPTEMBER 2022that without a clear focus, the opportunities will be missed. Risks are not being taken seriously: many in the industry are sceptical about the threat of disruption, and it is true that there are significant barriers and regulatory hurdles for new entrants to clear, but the disruption could easily come from within.Even where Investment Managers have recognised the opportunity offered by the innovative technologies to increase efficiency, productivity, and effectiveness, or change the business model, the success has been mixed. This lack of success can often be attributed to a number of factors such as clarity on the problem to be solved, the bureaucratic, process-heavy engagement model, and the lack of experience working in deep partnership. Other obstacles include: Firm culture, skills gaps, poor grasp on data management and ownership, complex operating models with varying levels of outsourcing, legacy technology platforms, and outdated working practices. Fintechs find it difficult to navigate firms, the procurement process is torturously slow, the budget is hard to find. Investment Managers need to recognise the strategic imperative of learning how to successfully partner and collaborate with Fintechs if the industry is to thrive.But it is not all bad news; there are efforts underway to shift the mindset, many firms are actively recognising the need to change their culture and move to a growth mindset. Some budget is being set aside for "innovation" and some dedicated roles are being created to focus on innovation opportunities. The Covid situation has shown that firms can respond very quickly to technology challenges and bring in innovative technology successfully when there is an urgent business imperative. Industry bodies are starting to respond, with the Investment Association launching their "Engine Advisory Panel" to improve the industry collaboration with Fintechs and support industry transformation through the adoption of innovative solutions. The UK regulator was the first to offer sandbox programs to Fintechs to allow ideas to be tested out, and in 2019 the Bank of England set up a "Post-Trade Technology Market Practitioner Panel" which brought together industry experts to explore how market participants could leverage technological improvements to deliver a more efficient and resilient post-trade ecosystem. So the tide is starting to turn, and it will be interesting to see who are the winners and losers over the next few years. The first obstacle to successfully adopting innovative technologies is recognising the opportunity and risk
< Page 8 | Page 10 >