Increasing regulation and digitalisation puts pressure for more efficient operations in the financial industry.
Different technological trends are discussed actively, but less attention is paid to how companies could utilise these new technologies to turn the opportunities into realised profits.
FA Solutions, A Nordic fintech company have launched a new technological innovation that enables companies in the financial industry to form efficient value networks. This Roboblock network can be established by any company and they can in turn invite their partners to join. For example, with a Roboblock network, a fund company or an asset manager can build new distribution channels for their products. The network enables each of the participants to concentrate on their special areas of expertise to enhance efficiency and gain benefits. “Roboblock networks are removing the need for extra middlemen and therefore enables significant cost savings. With the Roboblock network your imagination is the only limitation. For example, a robo advisor could collect the best asset managers around the world under one user interface”, envisions Hannes Helenius, the creator of the idea and Chairman of the Board at FA Solutions.
The network is utilising open application programming interfaces (APIs) to exchange information between the participants’ investment management systems. The data exchange is done safely, transparently and in real time. Each of the network participants can define what kind of data they want to exchange. For example, if they wish not to hand over customer information, portfolios can be tagged with identification numbers instead of customer’s personal information. And of course, all the actions carried out in the network are recorded as required by the regulations of the financial industry.
The solution already has its first customer case. Due to regulatory reasons and emerging business opportunities, an Independent Financial Advisor Investium decided to expand their offering with Discretionary Asset Management. Instead of hiring asset managers, Investium wanted to outsource the asset management function to JAM Advisors Ltd by utilising the Roboblock technology. Moreover, all the necessary banks and custodians are connected to the network for settlements, reconciliations, and other data transfer needs. While each of the network participants can concentrate on their own core business, data is transferred automatically and efficiently between the interfaces.
The new Directive on Payment Services (PSD2) will speed up the need for Roboblock solutions from the beginning of the year 2018. This directive is one of the most major changes in the banking industry as it enforces banks to open up their infrastructures to third parties by providing an access to their customer accounts and transactions. The change will be a great opportunity for the financial industry and companies seeking to enter the industry.