9APRIL 2021The first obstacle to successfully adopting innovative technologies is recognising the opportunity and riskthe bureaucratic, process-heavy engagement model, and the lack of experience working in deep partnership. Other obstacles include: Firm culture, skills gaps, poor grasp on data management and ownership, complex operating models with varying levels of outsourcing, legacy technology platforms, and outdated working practices. Fintechs find it difficult to navigate firms, the procurement process is torturously slow, the budget is hard to find. Investment Managers need to recognise the strategic imperative of learning how to successfully partner and collaborate with Fintechs if the industry is to thrive.But it is not all bad news; there are efforts underway to shift the mindset, many firms are actively recognising the need to change their culture and move to a growth mindset. Some budget is being set aside for "innovation" and some dedicated roles are being created to focus on innovation opportunities. The Covid situation has shown that firms can respond very quickly to technology challenges and bring in innovative technology successfully when there is an urgent business imperative. Industry bodies are starting to respond, with the Investment Association launching their "Engine Advisory Panel" to improve the industry collaboration with Fintechs and support industry transformation through the adoption of innovative solutions. The UK regulator was the first to offer sandbox programs to Fintechs to allow ideas to be tested out, and in 2019 the Bank of England set up a "Post-Trade Technology Market Practitioner Panel" which brought together industry experts to explore how market participants could leverage technological improvements to deliver a more efficient and resilient post-trade ecosystem. So the tide is starting to turn, and it will be interesting to see who are the winners and losers over the next few years.
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