The rapid advancements of technology in the last decade have placed the investment management industry in a unique situation, which has only been exacerbated by the Covid-19 pandemic and the sudden shift to remote working. Driven by these changes, innovative and disruptive financial technology is providing innumerable opportunities for investment managers to grow, be more agile, operate more securely, and importantly, improve their investment performance. But many firms are still restricted by legacy, physical server-based technology and hesitant to change from incumbent service providers to future-proofed SaaS solutions.
While sentiment towards new technology solutions has started to shift, investment managers are not unified in their uptake of this new opportunity to drive transformational change with fintech. Large swathes of the industry are yet to realise the benefits that tools like cloud technology can bring, such as a competitive edge in areas from risk mitigation to value maximisation, optimising data intelligence, and allowing firms to future-proof their operations and technology platforms. With the majority of the industry still working remotely and this set to continue long term, cloud-based technical support is vital to enabling employees to work securely on their own devices and away from the physical office system. Limina was founded on the belief that the answer lies with flexible, intuitive and cloud-based solutions that empower teams rather than limit them, and the company’s mission is to support firms looking to optimise their workflows for modern investment management.
Kristoffer Fürst is COO and founder of Limina, provider of an enterprise Software-as-a-Service Investment Management Solution (IMS) for institutional investors. He founded the business out of the practical experience and challenges of managing portfolios as a Quant Analyst at one of the largest European hedge fund houses.
What has been the traditional company response to financial technology innovations?
In my experience within the investment management industry, there are three main obstacles preventing mass uptake of cloud-based technology while the market learns more about the new solutions available to them. These come in the form of an unclear pathway for improvement, issues around trust, policies and compliance and finally, the availability of cloud and SaaS products from vendors. If the industry continues to see these as insurmountable obstacles and remains reluctant to embrace the power of cloud technologies, there will be many missed opportunities to improve competitive advantage.
How has this changed over the past few years?
There has been a small shift in the mindset of firms, and we are seeing a number of forward-thinking investment managers becoming early adopters. However, many are still inhibited by legacy technology and unaware of the advantages the newest cloud-native solutions can bring, without the downsides around data protection among others. This is an issue we are trying to address at Limina in our conversations with the market and our peers.
Is there anything that has created a culture of change inside the company?
Limina was founded out of frustrations with the practical experience of managing portfolios in a legacy environment, so at its core we knew what the industry was doing wrong, what firms really wanted, and how positive change could be implemented in reality. Shaped by that experience, we understand that investment teams want to feel empowered, and not reliant on a system that “just performs tasks”. This may sound simple, but in complex financial markets it is really hard to create a product and organisation that delivers on this. Our ambition to modernise the fund management industry for the future underpins the philosophy we have instilled and is why the team is continuously striving to drive impactful digital transformation for our clients. With this in mind, we have been able to cultivate a team of experts who share and apply their community knowledge in order to deliver on our commitment to asset managers and configure our solution to the best fit for their business.
What fintech ideas have been implemented?
Our IMS provides a seamless combination of traditional buy-side product areas, including order-raising workflows, pre-trade compliance and real-time portfolio insights. Its cloud-based nature allows for secure access around the clock, from multiple devices, meeting the demands of the global workforce, characterised by increased flexible working and international teams.
Fintech of this kind is a stark change from traditional systems which are typically installed in one place, on a physical server in a firm’s office. Software as a Service solutions, like the Limina IMS, can quickly solve problems around hotfixes, disaster recovery processes and backups. You then also have the agile-working benefits that come from cloud technology like mobile app functionality, the ability to update and mould the system without disruption, as well as enhanced cybersecurity processes.
What benefits have these brought?
The product we have developed meets our aim of providing a solution that is as accessible, intuitive and flexible as possible. Whether it’s through improved workflows, data visualisation or simply giving teams the ability to work together and collaborate from any location, the technology upon which you rely should unlock innovation, not hinder it. Cloud systems can ensure the full potential of investment teams is unlocked by ensuring a seamless experience for employees across multiple devices and locations. On top of this, firms can be safe in the knowledge their system is not at risk of falling behind the industry standards or latest technological developments.
Do you see any other industry challenges on the horizon?
ESG investing has quickly risen to the top of institutional investors’ agendas. Their clients are increasingly looking to channel their capital into sustainable and ethical companies, particularly as climate change discussions and initiatives come to the fore. However, firms are faced with reams of industry and company data to cut through, often sitting within different metrics and therefore hard to utilise in their investment process. It is only a matter of time until ESG investing themes become the standard for the whole industry, but the current challenge is making data more accessible and insightful for investors.
Can these challenges be aided by fintech?
Definitely. Cloud-native, agile technology can allow investment managers to automatically integrate ESG datasets without requiring any additional technology changes or onboarding delays. Having these tools enables them to gain a better picture of ESG data in a way that fits smoothly with their existing workflows, as well as the benefit of being able to access this information from anywhere at any time on remote devices.
We believe Limina has the potential to transform the relationships that the investment management industry currently holds with their infrastructure and their service providers. This is about empowering investment managers to build on their unique values rather than holding them down, as is too often the case. As the industry navigates this significant moment, we are looking to resonate and connect with those firms who want to build partnerships, drive their digital transformation and be recognised as innovators.