B2B2C model issues
With rare exceptions – as proprietary robo-advisors – European asset managers mostly distribute funds to retail investors on a B2B2C model via third-party distributors such as banks, financial advisors and insurance companies. In this commercial intermediation, funds firms have to face multiple challenges:
- Have a better knowledge of their clients: Asset managers don’t know neither what intermediaries are thinking about their products and information delivered, nor what their needs and wishes are. Fund providers are aware of what is happening when a fund is bought and when it is sold but what is happening in between can be a ‘black box’.
- Establish one-to-many relationships: Asset managers have difficulties to address all the fund buyers and customize information according to the specific needs of each other. Distributors are also becoming more demanding and they expect quicker and more personalized answers.
- Help intermediaries to face off regulatory obligations: professional fund buyers are under increasing pressure from regulators to be able to justify why they are invested in a particular fund on an ongoing basis.This involves collecting all the latest quantitative information and fund documents for each fund, as well as historical data and information on the relevant benchmark.
- Increase visibility and reputation: improve productivity, conquer and build stronger partnerships with fund buyers are major stakes in present funds distribution model.
Ffyn: a rapid-growth innovative solution to close the gap between funds providers & buyers
The French fintech Ffyn proposes a digital platform to connect funds professional investors with Asset managers. It uses the latest tech improvement (social, mobile,cloud, analytics and AI) to make things easier for the parties pre- and post-sale, providing fund firms with information about how banks and wealth managers track their products.
Before becoming a provider for other asset managers, Ffyn was an internal start-up 100%-owned by BNP Paribas Securities Services and named MyFundMatch. A little more than a year after its launch, the fintech took its new name with Maif, BNP Paribas Wealth Mangement, Generali, Cardif, Almagest Wealth Management as main investors.
Robeco, Fidelity and Allianz Global Investors have recently signed up for the digital platform, completing the client list, composed of other major funds companies such as Axa IM, Schroders, La Française, Pictet, Aberdeen, Sycomore and, of course, BNP Paribas Asset Management.
Ffyn’s solution is innovative. Any true competitor could be identified even if few fintechs propose resembled features. The closest one is Senasen, a UK platform where Asset managers can interact directly with a community of institutional and private investors, but without product tracking. Other platforms – such as iCapital Network (USA), Delio (UK), Fundbase (CH) – also offer connection with investors but only focused on Alternative and Private Equity market.
Make things easier for funds suppliers & buyers
Beyond classical features, the platform offers fund providers the opportunity to receive feedback on the information provided to their clients and the quality of after-sales service. They get notified about which investors got their funds. Thus, the platform sends an alert if one of their fund appears on a user’s watch list or if it is removed from a buy list.
With the aim of improving the relationship between fund parties involved, Fund buyers are able to use the platform to ask questions directly to different asset manager’s departments, such as portfolio management, client services, sales and marketing. Ffyn plans to provide an aggregate view of all the interactions between a fund provider and a fund buyer, helping asset managers spot patterns and gain insights about the needs and perceptions of clients.
The Ffyn platform also enables Asset managers to monitor fund literature by targeting communication according to the expectations of each investor. Relevant information is streamed automatically to fund buyers by Artificial intelligence and Professional investors get notified when documents are added to the platform.
Finally, because the platform enable Investors to upload their buy-list on the platform, Asset managers could broaden their reach in Europe & Asia and gain visibility.
The service is paid for by the Asset managers through a mixture of pay per user and pay per number of funds. For banks and wealth managers, the service is free to use but they must upload their buy lists in return for access to the platform.
Ffyn platform is able to improve client service quality, strengthen client engagement and enhance user experience, which has become the primary factor in acquiring and retaining customers. It will be also key in determining where and how consumers meet their financial needs. Thus, it could be an answer to the threat of Big Tech companies which are experts in this domain and have started to penetrate fund distribution market.
Author: Pascal Buisson - May 2019
