Schroders To Expand Cobalt Accelerator

Shanny Basar

Schroders has taken a stake in the first fintech that joined its in-residence programme as the UK asset manager aims to sign up more start-ups from around the globe.

The fund manager, with £449.4bn ($593.3bn) of assets under management, has taken an undisclosed minority stake in Qwil Messenger. Schroders, founded in 1804, launched Cobalt in March this year and Qwil was the first to join the scheme.

Charlotte Wood, head of innovation and fintech alliances at Schroders, told Markets Media: “The success of Qwil Messenger is a major milestone and lays the foundation for Cobalt going forward.”

She said Qwil Messenger allows clients to communicate quickly and securely with Schroders, in a similar way to using WhatsApp. The product meets regulatory and increased privacy requirements such as the recent GDPR legislation.

“We believe that Qwil’s product solves a real industry challenge, increasing the ease of communication for staff, clients and partners while ensuring the highest standards of privacy and confidentiality are achieved,” added Wood.

The fintech was initially slated to roll out a product before the end of this year, but went live in July, and is being piloted across some of Schroders’ businesses. Wood continued that the collaboration with Qwil will help ensure that the cohort’s future products can come to market more quickly.

Charlotte Wood, Schroders

“They found the mentoring aspect most useful,” said Wood. “For example, they did not have a procurement framework and were able to talk to our procurement team.”

Peter Reading, chief executive and co-founder of Qwil Messenger, said in a statement: “With our growth plans across all professional service industries we believe the backing of one of the largest asset management companies globally will enable us to further expand our platform and scale more quickly.”

Wood added that Cobalt is focussed on ensuring that Qwil successfully  rolls out to more clients and reviewing applications from other fintechs around the globe.

“We are laying the foundation for next year,” she said. “Our ambition is to have multiple firms in the cohort.”

The asset manager has a digital steering committee which scores each application against the program’s criteria, viability and importance to the business. Wood explained that the criteria is relatively broad but the technology has to be needed by a team in the Schroders group.

Wood said: “The development stage of a company is more important. They need to have a product that we can use rather than being conceptual or pre-product.”

IA Velocity

This week the Investment Association announced the first cohort of five firms that are joining Velocity, the trade group’s specialist fintech accelerator for asset management. A panel of 25 vetted all the applications, more than 30, and chose five successful firms – 9Fin, Essentia Analytics, Hivemind, ResonanceX and Util.

Graham Kellen, chief digital officer of Schroders, was chair of the Velocity Advisory Panel. At the launch Kellen said Velocity was a major milestone for the investment industry.

“It raises the profile of fund management and makes it more attractive for fintechs to work in this space,” he added. “The buy side has made it clear to fintechs that we have an open door to innovation.”

Graham Kellen, Schroders

Kellen explained that each applicant had to make a seven-minute pitch and the panel had a robust assessment criteria.

“We reviewed team strength, vision and their ability to execute,” Kellen added. “We also looked at their impact on the industry, how much they move the needle and how they quickly generate value.”

The program also aims to help to shorten time to market and help fintechs navigate a lengthy  procurement process within financial services.

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