The Future Is Bionic

Shanny Basar

Keith Skeoch, co-chief executive of Standard Life Aberdeen, said technology will be a great enabler in fund management if it used to address customer needs, but people will always be needed to explain information to clients.

Skeoch spoke on a panel at the Lipper European Alpha Expert Forum 2018 in London today. He said : “The future is more bionic than robotic.”

Martin Davis, head of Europe at Aegon Asset Management and chief executive of Kames Capital, was also on the panel. He agreed that asset management was close to a major disruption due to technology, but human intervention will still be required.

“Active managers will not be replaced,” he said. “They will always be needed to explain judgement calls to investors.”

Eoin Murray,  head of investment at Hermes Investment Management said the firm’s research process has changed due to artificial intelligence and big data.

Davis continued that communication with clients is undergoing a massive change.

“We are all under cost pressure,” Davis added. “Databases, such as blockchain, remove huge amounts of inefficiency along each stage of the value chain and will be a major disruptor.”

Skeoch said the fund management industry has yet to see the full impact of blockchain. “For example, it is not too hard to conceive of an app that allows individual customers in funds to vote at shareholder meetings,” he added.

Merger integration

Standard Life and Aberdeen Asset Management completed their £11bn ($14.4bn) merger in August last year. Skeoch said there has been good progress on the merger.

“The distribution teams and investment teams have been put together,” he added. “We are in the process of separating the life assurance book.”

In February this year Lloyds Banking Group ended its £100bn asset management mandate with Scottish Widows due to the merger.

Skeoch continued that the rationale for the merger was to create a large-scale provider to manufacture investment solutions.

“Product design is the language of past,” he said. “Customer need has never been greater but trust has never been lower. There has been too much focus on short-term capital gains versus long-term returns.”

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