CTO Roundtable: Re-Imagining Asset Management

Author: NICSA

Jib Wilkinson, Deloitte

On Thursday October 5, during NICSA’s 2017 General Membership Meeting in Boston, attendees received guidance on leveraging technology to power growth in the asset management industry.

Jib Wilkinson, Principal, Financial Services and Technology, Deloitte Consulting, led chief technology officers from Putnam Investments and Eaton Vance through the discussion, which focused on the business imperative for technology, challenges in talent management and a changing IT operating model.

Wilkinson said the market is facing an unprecedented level of change as assets under management have increased and revenues have decreased for the group overall.

“When you’ve got increasing market and decreasing revenues, that’s the business case for disruption,” Wilkinson said. The key, he said, is to harness that disruption and use it to power industry growth.

John Shea, Chief Technology Officer, Eaton Vance, argued that the disruption occurring in asset management technology “is more evolutionary than revolutionary.”

However, he said, “it’s absolutely a time to embrace new technologies that have been evolving and apply them to manage our businesses. Everyone has margin pressure, from the move from traditional Class A shares to retail managed accounts and exchange traded products—that’s the truth of our industry.” Supporting that industry, he said, requires “a lot more automation and technology.”

Sumedh Mehta, Chief Information Officer, Putnam Investments, said his firm views digital disruption as affecting all industries, all of the firm’s business partners and every aspect of what the firm does.

“The industry is going to change,” Mehta said. “That means the buyer is changing, the way they buy things are changing, the kinds of things they buy are changing; so how can it be that our world—especially in operations—doesn’t change?”

Instead of letting things evolve or taking a “wait-and-see” approach, Mehta said collaboration is key.

“It can’t happen by itself and it can’t happen within one company—it has to happen across industries, which is why I like this sort of an environment so much,” he said, referencing the NICSA General Membership Meeting. “You get a chance to meet with other people and share ideas. It’s no longer about ‘I’m going to keep my ideas to myself.’”

Shea said when it comes to big data, “At the end of the day, there’s real work behind this…it’s an evolutionary process. There’s so much data out there to harvest and harness, and different types of data that we want to look at—and there are a lot of challenges and opportunities there.” He stressed that there is no “easy button.”

Mehta agreed. “We don’t necessary know the answer yet,” he said. “We know that there is lots of information, we know that there’s lots of insight, and we can wait for Silicon Valley to come in and invent something—which they will do—because every big platform player like Amazon, Google, etc., is going to get into our space.”

“If we are going to create the next set of solutions—and we may not know what problem we’re solving yet—we need to create an area of discovery for our teams. It’s going to be lead by our talent. I completely agree that we’re going to need different skills sets, but I think there is an existing skill set in place that has such domain expertise/knowledge, that if we can unleash that with the new tools, it suddenly changes the game.”

Mehta said that when it comes to future leaders, the role of the product manager will be essential in bridging organizational silos to unite various skill sets.

“We view product managers as the new leaders of our organizations,” Mehta said. “We are challenging organizational boundaries that have been created for generations. The sooner companies like ours can adapt to it by working collaboratively, the sooner that culture is going to win out.”

Shea said that Eaton Vance is embracing an agile methodology tailored to the organization.

“I’ve seen other firms take a more draconian approach where they laid off a portion of their work force and introduced new skills,” he said. “We at Eaton Vance take a more evolutionary approach, and I feel like it’s been successful.”

While talent is a piece of the overall IT delivery model, it’s not the entire picture.

Mehta said that it’s essential to have a start-up mindset. “Companies that are going to be successful are the ones that have momentum on their side,” he said. “Momentum is the size of the change you’re willing to embrace in your organization multiplied by the rate at which you’re willing to embrace it.”

Shea pointed to Dev-Ops—the intersection of quality assurance, development and operations—which for his group entails applying agile methodologies to smaller teams that handle a product from end to end. “Where you get creative is where you draw the boundaries of your QA, your development and your operations,” he said.

Mehta warned that time is of the essence. “There is reason to be frightened, but I think there is lots of hope also,” he said. “I think it’s our job collectively to embrace change and ask more of our technology partners.”


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