Private Banker: What are the latest and most important trends in portfolio management software? What can vwd customers look forward to?
Torsten Reischmann: The dominant trend is the digitization of workflows and processes. An important aspect of this is order processing, where re-balancing, pre-trade checking, order book management and order forwarding to the executing entity are becoming increasingly digitized.
The focus is also on so-called hybrid customer care. The collection of relevant data, both one-off and continuous, is still often done on paper. Within the framework of MiFID II, more data has been digitized and added to the system, for example for target market comparison. It is now about more than just fulfilling regulatory requirements; it’s also about creating added value, e.g. through private asset liability management, and mapping these functionalities systematically.
Another topic that is gaining in importance is asset management. As a result of the technical developments at institutional asset managers, action is required by investment managers to optimize further. Merging market and portfolio information is the prerequisite and basis for this.
Private Banker: What are your plans for dealing with order interfaces?
Torsten Reischmann: Up to now, we have primarily implemented STP connections, especially for banks, to map single, collective and block orders to core bank or order management systems and thus automated rebalancing processes as much as possible, including pre-trade checks, often with double verification approval processes. Many asset managers often prepare individual rebalancing in part with other tools and fax order forms to the custodian bank. That has changed in the last few months. We are seeing more and more that structured rebalancing and pre-trade audits are relocating onto our systems, not least with regard to the negative target market and suitability. The desire for electronic transfer to the custodian banks is the logical consequence. However, as many custodian banks are still working to provide appropriate interfaces, the process is currently often only partially automated meaning that templates are being automatically generated by our systems for distribution. This will be further optimized and, simultaneously, we are working closely with the custodian banks to integrate the new custodian bank APIs. Our extensive experience in the development and maintenance of order interfaces with a large number of clients in the areas of asset management, banking and family offices will be significantly strengthened by our merger with Infront. Infront specializes in linking various trading systems or partners, and already has access to more than 600 trading counterparties. We can pass on this added value directly to our customers through integrated solutions.
Private Banker: What about the topic of Software as a Service (SaaS)?
Torsten Reischmann: Three years ago, we began to develop new, separable functionalities in a new microservice cloud architecture and made them available as our own SaaS / Cloud solutions. These include, among other things, services for the implementation of MiFID II and seamless integrated solutions for the end customer channels, including the Postbox feature. Early next year, we will provide portfolio information and ordering with market data information using an integrated SaaS installation in the cloud architecture. Portfolio manager and consultant/supervisory functionality will be gradually merged in the new solution infrastructure. Our customers can decide which functionalities they want to use themselves and which they want to make available to the end customer. Of course, the SaaS and cloud modules can be customized just as comprehensively as the vwd portfolio manager and the vwd advisory solution, which our customers are accustomed to and appreciate. In order to be able to test the customization during a release change, as well as to act in accordance with BaIT, our SaaS environment supports production testing systems. With a view to SaaS and Cloud services, it is important to consider that, unlike one-off purchases of locally installed software, for which only a small maintenance fee is paid, the price here includes the operation of and ongoing development of the software, as well as a software rental fee, so that only a true total cost of ownership comparison enables an objective economic valuation. The initial market reaction to the launch of our cloud solutions has shown us that this is not always easy. Looking back, we are convinced that the move to our modern platform service was absolutely correct, and it is pleasing to note that an increasing number of existing and potential customers are also very positive about the platform's advantages in terms of their visibility.
Private Banker: How is vwd addressing the topic of Robo Advisors?
Torsten Reischmann: For us, Robo+ means hybrid consulting and support processes. It is the option of taking individual steps, alternating or jointly, in the end customer processes - those used by investors and/or consultants. By merging the new vwd customer account solution - the end users’ portal for interactive account insight and access to Postbox - with the vwd advisory solution - the solution for customer advisory and support processes - we will use hybrid interaction in an integrated system with a consistent business logic and exactly the same data. We are firmly convinced that the added value for our customers and their investors lies in the automation and consolidation of processes and less in fully automated investment decisions using Robo-advisors.
Private Banker: When will blockchain technology be used?
Torsten Reischmann: On our enterprise-wide platform, we are already using blockchain technology productively, for example in our regulatory solutions for the audit-compliant, stable storage of input data and results in key figure calculation or document generation, with which we generate more than one million documents every day. Based on our platform approach, this technology is available to us for all products and we constantly check the various application areas and use new technologies, if it is sensible to do so.