London – 9 December , 2015
INTERVIEW: ACQUISITIONS TO REMAIN BIG PART OF OBJECTWAY'S GROWTH FLIGHTPATH
The Europe-headquartered fintech firm described some of its ambitions for the year, following a period of rapid growth.
Wealth and financial technology firm Objectway plans to continue using acquisitions as part of its growth strategy, adding to the high-digit percentage business growth chalked up over the past few years, the firm told this publication.
Objectway recently completed its purchase of the BETA Global clearing and settlement platform from media and data provider Thomson Reuters. This is an example of the sort of deals Objectway is making to drive growth, Peter Schramme, chief business development officer, said on the sidelines of a recent conference hosted by Objectway in London.
“We have finished our tenth acquisition...there will be another acquisition. We know how to integrate them,” he said. Objectway will make some extension into the insurance industry space, he said, and there will be some regional territorial growth as well.
Objectway revenues are in the order of €60 million ($65.5 million) or more and, as far as growth is concerned, the firm has expanded by 100 per cent in the last two years – doubling in size - both organically as well as via acquisitions.
“In terms of targets, we further aim to become one of the leading software and services providers in the wealth and investment management market in EMEA. This is our short to mid-term focus and all ingredients are available to pursue this goal in a reliable and robust fashion,” Schramme continued.
Founded in 1990, this Europe-headquartered firm chalked up, in 2014, a WealthBriefing European Award for Best Front Office solution. From offices in Italy, Belgium and the UK, the firm’s 600 employees support more than 100,000 investment professionals in 15 countries across three continents. The last few years have seen a run of acquisitions and deals, as previously mentioned. For example, the firm extended its offering in France, Spain, Portugal and Ireland. Futurimpresa
SGR, an institutional investor affiliated with the Chambers of Commerce of Milan, Bergamo, Brescia and Como, has taken a €10 million stake in Objectway Financial Software through the “Finanza e Sviluppo Impresa” fund. Objectway has acquired AMS and subsequently Eximius, a subsidiary of Thomson Reuters. In December 2014 it acquired 3i Infotech Western Europe.
The growth, and M&A consolidation, in the fintech space mirrors a similar process going on in much of the world’s wealth management market, with firms eager to grab market share, scale and depth of talent to ward off competitive threats and deal with compliance and associated costs.
At the conference, delegates were told by top Objectway managers, and figures from other firms, about the evolving nature of fintech, including such hot-button themes as “robo-advisors” and the challenges – and opportunities – of big data.
This publication asked Schramme whether the wealth management industry is missing a trick in not making more out of the technologies already available, such as video link-ups and techniques for allowing a computer user to have a real-time link with an advisor.
Schramme said such technologies – allowing the advisor to discuss issues remotely and in detail, in real time, with a client - are crucial. “It is the future of business in certain segments of the industry,” he said, referring to the idea of matching technological interaction with existing advisor connections and clients.
During the interview, Schramme and this publication discussed the issue of how technologies such as “co-browsing” enable clients to get in touch with advisors and, in real time, show each other their investment and financial circumstances even though they are a distance apart (techniques such as split screens with the advisor presenting an issue in one part of a screen and the client doing the same in another part, for example).
“This all about making your digital engagement actionable,” he said, adding that this all needs to be done as part of a compliant, robust system where any decisions and advice can be audited and tracked. Schramme also referred to the concept of the “hybrid advisor”.
“Hybrid advisor is a concept [or] approach in which the end investor defines in which way she or he wants to engage with the financial institution, either fully online, or fully face-to-face or any shade of grey in between these two extremes,” he said.
“Hybrid advice implies a blend of online, virtual and face-to-face interactions between the end investor and the advisor, all managed seamlessly from one and the same platform. It allows to switch from one interaction channel to another during one and the same process, when and if relevant for the end client,” Schramme continued.
At the conference, wealth management firms were told they must be bolder about new technologies, or risk being left behind.
Despite the demands of an ever-increasing number of digital clients, wealth managers are moving too slowly on developing a complete digital strategy that integrates multiple channels, services, and delivery models. Analyst Ashley Globerman from Celent said that, while wealth managers had begun to implement aspects of a digital technology strategy, they were slow in adopting hybrid delivery methods and addressing the automated investment advisory space.
“Power is shifting to the client and this trend will continue as new digital providers enter the business,” said Globerman. “Wealth management firms that are slow to respond to these changes will be at a significant disadvantage,” she said. Among wealth managers who have recognised the need to act sooner rather than later is Belgium-based TreeTop Asset Management, which shared the firm’s experience with Objectway’s digitally enabled omni-channel Conectus platform. TreeTop used Conectus to develop its TreeTop ONLINE digital customer portal and transform its business with an online solution.
In his closing speech at the Conference, Jim Marous, market influencer and co-publisher of The Financial Brand, said digitally engaged high net worth investors are driving the wealth management industry towards greater use of digital technologies.
These investors are socially active, always connected, and start their investment management shopping process online. As such, they have created a market for automated advisory tools based on artificial intelligence; this is just the first step towards sophisticated virtual advisors that in a not-so-distant future will leverage the bigger trends growing today like the Internet of Things and big data, he said.