For the great of the traditional financethe democratization from investmentespecially in the digital assetspasses through thefinancial educationthe confidence and the technology.
The NFT Factory and its founders set out to democratize the use and ownership of NFTs. Mastercard wants to encourage him to democratize cryptocurrency trading between banks. For a fintech like Lydia, this democratization means simplifying access to investment.
Democratizethis goal concerns everyone financial players, both digital and traditional. However, this democratization is not based on a single category of goods or a single lever of action.
Crypto: gold rush and train not to be missed
The institutions of the traditional finance (TradFi) they also do not share the same priorities as their counterparts in Challenge or crypto-native. So, for Emmanuelle MoureyChairman of the Board of Postal Bank Asset Managementthe crypto it is still today “from the gold rush to the far west era”.
The leader spoke at the conference AM technology day. These statements point in part to the excesses of a nascent market. But not only.
On cryptocurrencies, the challenge is to remain on standby so as not to miss the train. Because it will take”, assures Emmanuelle Mourey.
However, the financial sector has other challenges. Socially Responsible Investments (SRI) it currently requires huge investments from the sector, in terms of data and skills. These expenses must also translate into economic results, a priority for everyone.
On private assets, the issue is liquidity, i.e. the way of offering liquidity on products that are not essentially liquid”, notes the representative of Banque Postale AM.
Democratize in a very fragmented market
Each segment has its own democratization challenges. Convergence is still possible, and even desirable. “The biggest challenge for me is doing it democratize access to assets », so he considers Guillaume Lesagedeputy managing director ofAmundi Asset Management.
This is the most complicated thing. We talk about crypto, blockchain, etc., but the real issue, in my opinion, is being able to democratize access to investments for individuals. And it’s a complex challenge,” she adds.
In early 2022, KPM extension estimated the share of French people who have already invested in crypto-assets at 8%. A figure higher than that of the holding of treasury shares (6.7% according to the MFA). The 12% of crypto-investors predicted by the study at the end of 2022 may not be reached due to the bear market and a new episode of mistrust triggered by bankruptcies such as Luna, Celsius and more recently FTX.
To democratize investment, digital has an important role to play, thanks for example to the diffusion of robo-advisor. Guillaume Lesage, however, considers the current digital offer “very fragmented, fragmented and too complex”. Amundi’s framework therefore requires a simplification of investment solutions.
Objective ‘resale’ of the investment
there” Retail investment therefore requires, according to him, aggregation, a fluid and easily accessible technology, a combination of human and digital, and multi-product. “Perfection is not when there is nothing left to add, but when there is nothing left to take away,” he quotes to illustrate the task at hand.
The technology and its simplicity are levers, but their development must be accompanied in parallel by a work of circumvention financial education, the panelists point out. “It’s a key element,” he insists Yoan Chazalpartner for the investment management services branch of Deloitte.
We have very few individual investors in France, but it’s also a European model, on the capital markets,” he recalls.
And this assessment has its reasons, of which the problem of access faced by technologies is not the main one. “They don’t invest because they think it’s not for them. They do not know or do not master,” testifies the consultant.
This observation is directly related to the topic of confidence, consider again. However, in this sector, financial institutions suffer from a low level of trust. However, this obstacle is not necessarily prohibitive.
An investor has more trust, even if the level is not crazy, in his bank than in a fintech to manage his savings”.
Private equity funds in transformation
In the private equity market, trust is one parameter, but not the only one. Joseph Pintodirector of international distribution of Natissi IMinsists on the technological component for the benefit of operations. Automation digitally enabled will be essential to democratize and serve more customers.
Many private equity funds did not necessarily invest in the middle office and technology because they had few subscriptions per month of several hundred million euros in terms of tickets. They knew how to do it manually,” explains Joseph Pinto.
However, democratization radically changes the business model by requiring the management of hundreds, even thousands, of subscriptions by investors every week.
Digitization is essential if democratization is to be achieved”, warns the CEO of Natixis IM International.
Reassure the investor through digital and human
In this perspective, companies can review their information systems, or even rely on fintechs to accelerate the transformation.
On the subject of democratization of investments, Guillaume Lesage of Amundi, however, returns to the more macro need to “reassure the investor”.
The offer is plethoric, but too complicated. He must therefore be reassured that he is not taking any risks, which are of different kinds. For this, the technology must be robust and give the investor the feeling that it is modern”
“(…) The second point is solidity in risk management. Finally, he is the adviser. At all times, the person wishing to invest must be able to access a competent and available consultant who can reassure them about the investment”, she concludes.