Kneip, the Luxembourg based services provider to the asset management industry, has launched a platform to facilitate digitalisation and streamlining of investor data and processes such as reporting, which founder Bob Kneip says will significantly reduce costs while improving transparency for users.
The platform is intended to reduce the burden on asset management firms from regulatory demands, as well as meet the growing need to de-duplicate data and data based processes, by offering a single platform described as “managing the entire fund lifecycle from end to end”.
For example, the platform is designed to facilitate drag-and-drop functionality for fund managers seeking to build reports and output reports intended for regulators.
Kneip says this is a significant change on the status quo, in which many managers would, for example, use a fund registration team to compile data and build reports, but then use both external and internal legal departments to scrutinise reports before they are sent to regulators.
“Regulation should be the burden it’s become,” Bob Kneip explained, outlining the reasons why the firm he founded and for which he is now chairman, has moved to develop the platform.
“The platform is to reverse the trend to duplications, of reconciling data residing in multiple silos. All of this can be guided from a single platform.”
“This affects transparency, availability of information, ease of access, and time to market, which is of interest to asset managers and investors.”
“Data consistency is an issue. It raises questions and doesn’t bring confidence to investors. So, coming from there, it’s been a dream for a decade to create a unique platform, where investors can make available and access data. That’s one part of the equation. Reporting is another issue. Calculations are required, for example, under Mifid, Priips, but this is based on the same data, so why require replicating data over and over again?”
“If we know the fund range and distribution matrix – where the funds are registered for distribution and know the channels that need to be fed – then we can use the same data in multiple ways. We can generate multiple outputs from this data ‘lake’.”
The advantages for reporting are numerous, Kneip continues: the system can be set up to provide more automated reporting, but can also monitor multiple factors depending on target groups; it can generate the statistical reporting for authorities – all based on the same data.
The launch of the platform addresses a concern that Bob Kneip has seen across the industry for the past decade or more, in which there has been a constant need to play ‘catch-up’ with regulator developments.
Partly this has been down to the industry not previously seeing itself under threat in the same way that, say, the telecommunications sector companies have.
“There’s never been an existential threat, so the need to change hasn’t been there until the past year,” he suggests.
Also, technology advances in just the past couple of years have enabled developments to progress.
The platform that has been launched will start its rollout in the European region, but can by implication be applied in other regions. For example, Ucits are sold outside Europe, which create another area of possible leads.
And the platform could be implemented through partnerships with other services providers who are tackling particular aspects of the fund industry value chain, for example, in the area of order messaging.
Kneip said that the rollout will be determined by engaging with existing clients and gaining an understanding of how they would like to engage in using the platform. Kneip does not own the data, the asset managers own the data, he noted.
It is also intended to be of use to both larger, older management firms, as well as younger boutiques. For example, should new regulations enter into force, affecting any size of firm, the ambition of the platform is to reduce the need for multiple solutions.
Licencing details and the pricing model for users are to be confirmed, but will also be based on discussions with customers, Kneip said. However, the platform is live and can be deployed to both new as well as existing customers, he added.
Speaking more broadly about the future of the asset management industry, Bob Kneip said his own opinion is that there are two to three key issues being ‘sensed’.
The first is to fix the regulations that have not worked, for example, around target market risk and forecasts of future performance combined with past performance reporting.
The second is to address convergence, both within countries but also globally – although the latter would require more agreement over tax in particular.
Brexit is resulting in more people setting up multiple offices either side of the channel, Kneip acknowledges.
He sees it as leading to short term disruption, but as “the final lines are not written, it will take time”.
“I see a lot of short term action by asset managers not to be cut out of the action, for example, to ensure customers can still be served.”