for big of traditional finance, democratization e INVESTINGespecially in digital assetspasses throughfinancial education, trust AND technology.
of NFT factory and its founders have set themselves the ambition of democratizing the use and possession of NFT. Mastercard wants to encourage that democratization of crypto-trading in banks. For one fintech like Lydiathis democratization includes simplifying access to investment.
democratizethis objective is about everyone financial players, both digital and traditional. However, this democratization is not based on a single asset class or a single lever of action.
Crypto: the gold rush and the train not to be missed
of institutional of traditional finance (TradFi) also do not share the same priorities as their counterparts in Challenges or crypto-natives. Thus, for Emmanuelle MoureyChairman of the Board of Banque Postale Asset Management, crypto it is still today “from the gold rush in the era of the far west”.
The leader spoke at the conference AM Tech Day. These statements partly indicate the excesses of a nascent market. But not only.
In crypto, the challenge is to stay alert so as not to miss the train. Because it will be necessary”, assures Emmanuelle Mourey.
However, the financial industry has other challenges. Socially Responsible Investments (SRI) it currently requires significant investment from the sector, in terms of data and skills. These expenses must also be translated into financial performance, a priority for all.
In private assets, the subject is liquidity, i.e. the way of providing liquidity for products that are essentially illiquid”, notes the representative of Banque Postale AM.
Democratize in a highly fragmented market
Each segment has its own democratization challenges. However, convergence is possible, even desirable. “The biggest challenge for me is democratizing access to heritage », he considers so Guillaume LesageDeputy CEO ofAmundi Asset Management.
This is the most complicated thing. We talk about crypto, blockchain, etc., but the real topic, in my opinion, is to be able to democratize access to investments for individuals. And it’s a complex challenge,” he adds.
In early 2022, KPMG evaluated the part of The French who have already invested in crypto-assets at 8%. A figure higher than that of holding own shares (6.7% according to AMF). The 12% of crypto-investors expected by the study at the end of 2022 may not be reached due to the bear market and a new episode of distrust caused by bankruptcies such as Luna, centigrade and recently FTX.
To democratize investment, digital has an important role to play, for example, thanks to the establishment of robo-advisor. Guillaume Lesage, however, considers the current digital offer to be “too fragmented, fragmented and too complex”. Therefore, Amundi’s framework requires a simplifying investment solutions.
“Retail growth” investment objective
there” retail sales Therefore, investment requires, according to him, aggregation, a fluid and accessible technology, a combination of human and digital, as well as many products. “Perfection is not when there is nothing more to add, but when there is nothing more to take away,” he quotes to illustrate the task at hand.
of technology and its simplicity are levers, but their development must be accompanied by work financial education, highlight the panel members. “It is a key element”, he insists Yoan Chazalpartner for the investment management services branch of Deloitte.
We have very few individual investors Francebut it is also a European model, in the capital markets”, he recalls.
And this assessment has its own reasons, of which the problem of access, addressed by technologies, is not the main one. “They don’t invest because they think it’s not for them. They don’t know or don’t own it,” the consultant testifies.
This observation is directly related to the topic of trust, he still thinks. However, in this area, financial institutions suffer from a low level of confidence. However, this obstacle is not necessarily a deterrent.
An investor has more faith, even if the level is not crazy, in his bank than in a fintech to manage their savings.
Private equity funds in transformation
In the private equity market, trust is one parameter, but not the only one. Joseph Pintodirector of international distribution of Natixis IMinsists on the technological component for the benefit of operations. Automation enabled by digital will be essential to democratize and serve a greater number of customers.
A lot of private equity funds haven’t necessarily invested in middle office and technology because they used to have a few hundred million euros per month in tickets. They knew how to do it by hand,” explains Joseph Pinto.
However, democratization fundamentally changes the business model by imposing the management of hundreds, even thousands of subscriptions from investors every week.
Digitization is critical if you then want to democratize”, warns the CEO of Natixis IM International.
Secure the investor through digital and human
In this perspective, companies can overhaul their information systems, or also rely on fintechs in order to accelerate the transformation.
Regarding the democratization of investments, Guillaume Lesage of Amundi, however, returns to the more macro need to “secure the investor”.
The offer is abundant, but very complicated. Therefore he must make sure that he does not take risks, which are of various kinds. For this, the technology must be powerful and give the investor the feeling that it is modern”.
“(…) The second point is consistency in risk management. Finally, there is the advisor. At any time, the individual who wants to invest should be able to have an advisor, competent and available, and to calm the investment”, he concludes.