We recently interviewed Thibault Chollet, Partner in Private Markets Operations & Technology Transformation at Deloitte Luxembourg as part of our Luxembourg Launch. Here we revisit his perspectives on the trends driving the adoption of technology in the Corporate Services, Trust and Fund Administration markets.
To mark the launch of our new office based at the LHoFT, Keith was joined by Thibault Chollet to review the changes in the FinTech marketplace, particularly those that have been behind technology adoption.
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For me, the most important trend is the consolidation of the market, around already large organisations acquiring further companies, potentially in the US or Asia. The resulting bigger group or conglomerate then recognises the need for technology that can cope with the potentially complicated requirements arising from the merger of those companies.
At Deloitte, we are also observing smaller Merger and Acquisitions activity, more along the lines of lift-outs of corporate tax reporting services, transfer agencies, even fund admin, allowing managers to focus on their core operations and delegate corporate services activities to a specialist provider. In this activity, it is not just a lift-out of the organisation but of systems - this being good or bad is still an open question!
Traditional service providers are entering alternate funds investment markets, bringing with them a willingness to invest in new technology. They are coming through a combination of the M&A process discussed previously, but also through organic growth as they recognise services they don't offer and need to scale as quickly as possible.
New ways of doing business are driving new ways to engage with the end client - we've thought a great deal about this and how it affects the client experience. Perhaps most significantly, over the last 12-18 months, we've seen an acceleration in a number of areas that have enabled remote working and tasks, such as onboarding of investors or of directors, with associated recognition that agents can be leveraging these technologies to enable seamless interactions with stakeholders as they grow.
“If I l compare Corporate Services to other industries - and I must be blunt - technology adoption is low”
If I l compare Corporate Services to other industries - and I must be blunt - technology adoption is low. They may be equipped with accounting systems but this does not enable them for the challenges they face as they move into new markets and sectors. COVID has been an accelerator, but this shift would have happened anyway. This has become particularly prevalent among the consolidators. As they have grown through M&A, they have been left with multiple solutions - none of which are certain to fit the new structure and requirements. There is certainly a drive to review this, both internally and through reviewing the marketplace to build a more integrated ecosystem led approach.
What these actors are looking at is no longer a 'one system fits all' mechanism, more a portfolio of solutions that fits their market requirements, based on a system that delivers the capability they need. The new markets that CSPs are expanding into have different requirements placed upon them and they need to respond in kind, with base systems that offer flexibility to adapt to changing environments
Definitely furtherance of the consolidation trend, but accompanied by increased specialism among the smaller providers. I would expect an increased level of standardisation to emerge among platforms but also increased openness to emerge. Also, we must not forget about distributed ledger technology - blockchain continues to grow and will have greater application to this marketplace.
Many thanks to Thibault Chollet, who can be contacted via his LinkedIn profile
Andrew is Senior Product Marketing Manager at TrustQuay