IA launches fintech guidance for investment managers

The Investment Association has released guidance for fintech engagement. In light of growing margin pressure on firms, as well as demand for operational efficiency and improved consumer outcomes, fintech adoption is increasingly seen as offering investment managers solutions to pressing business needs.

The new guidance, ‘Best Practice for FinTech Engagement’, was spearheaded by Graham Kellen, chief technology officer at Schroders Personal Wealth and former Engine Advisory Panel Chair, and written by the Engine Advisory Panel of industry tech and digital experts from the IA’s Engine FinTech hub, provides investment managers comprehensive advice for understanding, on-boarding and implementing fintech within investment and wealth management.

The guide follows the process of considering fintech engagement from the establishment of a clear ‘problem statement’ or business need through to the implementation of new technologies within firms, and provides operational advice and checklists for both investment managers and FinTechs. The guide also provides recommendations on the following areas:

  •  Organizational readiness for being able to consider engagement with fintech firms;
  • Scouting out and assessing fintech solutions;
  • Common pitfalls to avoid when working with fintechs;
  • Mutual intellectual property considerations;
  • Ensuring tech solutions are fit for investment management; and
  • Being a responsible client of a start-up.

Gillian Painter, head of Membership and the Engine at the Investment Association, said in a statement: “For too long the investment management industry has been a laggard at adopting the new technologies of tomorrow. But in the face of consistent margin pressure, increasingly sophisticated client expectations and rapid digitalization in response to COVID-19, it is now more important than ever that we identify hot spots for automation and develop effective processes to ensure the latest technologies are utilized to their full potential.”

The guidance also offers advice specifically for fintechs on how to reduce friction in large client engagements, and follows the launch of The Engine’s taxonomy tool earlier this year, outlining the investment management industry’s value chain in an effort to more easily match up fintech solutions with investment management business needs.

Read the full guidance

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