Review of Irish Funds Annual Global Funds Conference 2019

We published a similar live blog for the 2017 Annual Conference and while we missed 2018 several people have asked for us to cover 2019 in a similar fashion.

So here you go!

This year's conference is titled "The Future of Funds - Evolution or Revolution?"

To me the answer is a bit of both. We continue to see incremental improvements across the industry reflecting it's evolving nature. However, due mainly to regulation, the industry has to date been insulated from major disruption.

How long will this regulatory moat withstand invaders? Are barbarians at the gate ready to storm the castle?!

Ok maybe a little dramatic but all I've been hearing about lately is Game of Thrones finales. For fans, rest assured, there will be no spoilers below.

You can view the full agenda, speaker bios etc on the Irish Funds website here.

8.00 Registration & Breakfast

Drop by to say hello to us Stand 28. We're raffling a brand new set of Callaway Golf Clubs on the day.

MC for the day Laura Wadding runs through the essentials, Wi-fi, social, slido codes.

8.50 Opening Address – Irish Funds Chair

Welcome Yvonne Connolly, CEO Ireland at Carne Group, as incoming Chairperson of Irish Funds. A busy week that includes 250 jobs announced by Carne in Kilkeeny and Wexford. Congrats Yvonne on both.

Live comments

Yvonne welcomes our dignatiories, regulators and visitors from China.

How has the world and our industry evolved since 1998?

Financial Services and Invesment Management has changed drastically since 1998.

Back then we'd no Euro and a fraction of today's AuA. No such thing as ETFs back then either.

The biggest company in the world back then was Microsoft with a market cap of $250 billion dollars.

There was no Google or Facebook around. It was also the year DVDs came to Ireland and the launch of Netflix.

The Funds Industry as grown from €70 Billion in '98 to almost €4.28 Trillion today.

The Industry here now employs over 16,000 people and services over 14,000 funds.

Yvonne discusses the changing landscape of technology and importance of regtech in the industry.

Al Gore gave a great speech at FundCongress this year in London and Yvonne highlights how we all have the opportunity and responsiblity to take action to benefit climate change.

Final thoughts come from Al Gore "Each and everyone of us can make changes and have an impact"

9.05 Economic Impact & Strategic Direction of the Industry

Pat Lardner, Chief Executive, Irish Funds

Live comments

Pat discusses the impact the Irish Funds Industry has both domestically and internationally.

Our number one global message should be how the industry supports savings.

The recent Indecon report captures the economic impact of the Irish Funds Industry.

A total tax take of €837 million for the State in 2018.

The Industry firms had total Revenue / Fee income of €9,271 million in 2018 and directly employs 16,003 people in Ireland.

As a regulated industry how to we services clients in the most responsible and efficient way.

Survey resonpondents came back with a view of about 20% business volumes in the next 5 years.

You can read Pat's detailed post on the postiive contribution of the funds industry to Ireland's economy here. Here's also a link to the Economic Impact Assessment Report itself.

Some of the optimistic forecasts predict over 20,000 people employed and a tax contribution of €1.14 Billion in 5 years time.

The industry has a great story to tell on what we do. Very important around advocay for future legislation.

Few parting thoughts. "It's a positive tipping point". A positive time for the industry with many new entrants to the marktet here.

Also an important time for advocating strongly in Brussels. "Changes in the neighbourhood shouldn't change community.". Regardless of Brexit we should still focus on meeting the needs of savers as best we can. That should be the focus.

We want you to walk away with a determination for what we do next.

Rousing words from Pat on what the Industry needs to do.

9.15 Government Address from Michael D'Arcy, Minister of State at the Department of Finance

Live comments

Laura introduces Minister Michael D'Arcy with a special mention of his role in winning the 1992 All Ireland Junior Football title with Wexford. You can take the girl out of Wexford...

The Minister reviews the progress of the Industry over the last 30 years.

He also recognises how the Industry can't stand still to continue to be competitive.

A nod to changing forces of technology and how we need to handle the challenge of automation.

The Irish Funds Industry contributes 22% of Corporate tax take and has 1.9% of overall employment.

Minisiter challenges the Industry to promote the Industry better internationally.

The former promotional role of The Central Bank Ireland that was removed 10 years ago is now being moved to The Department of Finance.

After the local elections the Department of Finance will be reorganising the promotional resources.

The Minister predicts a growth in Sustainable Green Finance and says Ireland can be a global hub for the sector.

We have a great regional overing in Ireland but not enough people know about it. We need to promote the clusters.

9.30 Panel Discussion: Business Leaders

Moderator: Andy O’Callaghan, PwC
Panellists: Victoria Brown, Aberdeen Standard Investments;
David Greco, Fidelity International;
Angela Billick, John Hancock Investments;
Glenn Thorpe, Goldman Sachs Asset Management

Live comments

First panel of the day is ably moderated by Andy O'Callaghan from PwC. Interesting panel of firms who have chosen to locate in Ireland for various reasons including Brexit contingency.

Trends the panel are seeing from investors include a desire for customisation.

Cost is an area that investors are focused on. The market wants investment solutions rather than standard packages. Looking for outcome based solutions.

The challenge with outcome based solutions is how we categorise and talk about investments. Kind of breaks the current model.

How can the industry be cost competitive and remain profitable?

Consolodiation and scale helps achieve this. Will big keep getting bigger? It looks that way.

Two types of scale; plaform scale with diverse products. Regulatory cost plus fixed cost is making boutique firms look at sub advisory. Hard to have one or two funds and be sustainable.

Everyone trying to do more with less. The end result is to try provide a more cost effective solution to end investors. Leverage technology to do more with less.

Where are the best opportunities for growth?

Asia, China the next big thing. Once some regulations are liberalised products will be established and distributed there.

More in the ETF space. Still viewed as an area for growth. Also absoulute return products are important for Fidelity.

For Goldman Sachs sub advice space has been good for driving business. Also regional growth, South Africa mentioned.

Overall everyone positive, upbeat and seeing opportunities.

Fidelity gone from 50 to over 400 people in Dublin. Creating a capability hub in Europe and creating a diversity of locations. Lots of back, middle office here. Call centre, Global Head of Product here.

Trying to leverage the talent here in Ireland, technology, Investment management business here.

John Hancock, ManuLife have about 60 people mostly in London. Was on the agenda to open in Ireland but accelorated by the 'B' word.

Goldman Sachs have over €100 billion here in Ireland. Space for up to 30 people for GSAM which will make it their second biggest office in the EU.

Standard Life has been in Ireland since 1836 and have over 300 people. Established a Mifid firm in Ireland with ManCo in Lux. 16 people here in Dublin.

Ireland has benefited from approx 35% of Brexit related moves in Financial Services.

How can Ireland continue to attract this investment?

People are critical. Education is important and also Dublin benefits from a diverse population. Make sure they have the skills to join the workforce and be successful.

Consistent thematic around regulation very important for global firms.

No questions for panel. You'd miss Andy in the audience to start the questions when he's moderating!

10.10 Address from the Central Bank of Ireland

Ed Sibley, Deputy Governor, Prudential Regulation, CBI

Live comments

I think these speeches are normally published in full so having a look to see if I can find a link.

And here's the full script.

10.25 Panel Discussion: The Future of Regulation

Moderator: Mary O'Dea, Institute of Banking
Panellists: Evert Van Walsum, ESMA;
Nick Miller, FCA;
Tanguy Van De Werve, EFAMA;
Martina Kelly, CBI

Live comments

I missed this panel but spoke to a couple of people afterwards.

Was summed up as more regulation to come but perhaps more targeted than in the past.

Coffee break was needed and I've done my swag run!

11.40 Keynote Address

Richard Susskind, OBE, author of “The Future of the Professions: How Technology Will Transform the Work of Human Experts”

Live comments

Richard has 20 mins to convince us our world is going to change rapidly. This should be interestiing.

5 Topics: mindset - professions - technology- artificial intelligence - compete or build?

Sell customers on what they fundementally want, not what you do.

We're seeing the emergence of dispruption in professions.

Since 2014 algorithms have been creating earnings reports.

Several elements of professions are being replaced by software. Architecture, medical and even confessions are being automated.

Is there anything to be said for another mass father?

A system can now read emotion and tell what you are feeling. Can also tell whether a smile is real or fake more effectively than a human - amazing albeit scary stuff.

There is no finishing line with the progess of technology.

Short term AI predictions hugely overstate the impact and long term predections greatly under-estimate it.

We're moving from systems that are programmed to systems that learn.

OK, we're all being replaced by AI. Packing up the stand now.

Audience listening intently to this session. Many reconsidering their careers.

Key question: Do we compete with this AI enabled systems or build them?

The great opportunity is to build the systems.

Des, unpack that stand, we're back in business!

Redeployment not unemployment.

People don't want professionals they want the outcomes you bring.

12.00 Panel Discussion: The Future of Work

Moderator: Neil Sands, Fox Design Thinking
Panellists: Dr Susan McKeever, Technological University Dublin, School of Computer Science;
Richard Susskind OBE, Author;
Marie Dzanis, Northern Trust Asset Management;
Colin Meagle, Continuum Group

Live comments

Great panel discussing the future of work. Will it be evolution or disruption?

75% of the workforce will be millenials by the year 2025. By most metrics that's anyone born from the early 1980's onwards.

That will present a new challenge how to manage the workforce.

It will be a shock to the system to manage this new generation in regulated financial companies. No doubt cultures will have to evolve to survive.

Massive changes like we've seen with Robo advice. Millenials looking to self manage their investments.

Rewards changing too. Even free food in work starting to feel dated. Although I think that's very much been a tech perk, usually we see tech trends hit FS 5 years later. We might get free lunches yet!

Every profession believes the impact of AI systems only implies to other industies and not their own.

A blend of excitment and fear with AI.

"Will the changes in technology lead to better or worse distribution of wealth across the world?" A question from Paul Nunan from slido.

Initial reaction is better distribution.

Those that master their data within the regulartory restrictions will be the winners of the future. Can't agree with that any more. Still lots of work to do.

Andy O'Callaghan raises the question of cyber risk with all this data. A very important question and a big reputational risk.

That risk will also extend to a health risk when we get into driverless cars.

Companies need to be open to ideas coming from young employees.

12.40 Keynote Address

Andrew McDowell, Vice President, European Investment Bank

Live comments

What is the European Investment Bank?

A balance sheet of just under €600 billion and about twice the size of the World Bank.

Triple A rated. Mission to use it's resources to strenghten and facilitate projects that support European policy goals.

Will support areas where there isn't enough investment in an area but has wider social benefits.

About 90% of investments within the EU. Invested over a billion in Ireland in 2018.

Projects include Dublin Airport T2, Universities and hospitals.

Also supports corporate projects in partnership with other funds, not just government infrastructure.

14.20 Keynote Address

Peter Branner, CIO APG Asset Management

Live comments

A lovely lunch had with thanks to Northern Trust.

There's been a lot of talk about AI replacing people today. First test coming up to see if the tech can manage to beem in Peter Branner who is presenting remotely.

A high quality seamless picture and sound. Maybe tech is the future. For remote speakers at least.

Peter is saying this is evolution not revolution.

Peter shared his journey through numerous IT projects and how they have successfully leveraged data internally.

The digital revolution has been going on for a while. In practice is it hard to disrupt ourselves.

14:40 - Parallel Panel Discussions - FinTech and Artificial Intelligence

Moderator: Moderator: Mary O'Dea, Institute of Banking
Panellists: Lior Yogev, FundGuard;
Olivia Vinden, Alpha FMC;
Rachel Howick, Citi;
Miroslav Petrov, Fortia Financial Solutions

Live comments

It's breakout time and surprisingly I've headed for the Fintech and AI panel. Looking forward to this.

Great to hear about the Calastone DMI project go live. Technology being mentioned as having most impact on Transfer Agency is Blockchain.

One restricting element for mass Blockchain adoption is the need for all Industry participants to collaborate. Collaboration is something the funds industry has struggled with historically.

How far away are we from an App with Live NAV prices?

There will have to be a replatforming of legacy technology in the next 5 to 10 years to deliver across the industry. Lots of technical debt to overcome.

Heading in the right direction but the piping is just not there at the moment.

How does the Calastone DMI manage GDPR and the right to be forgotten?

The DMI doesn't include and PII as it's immutable. It'll be interesting to see if a way is found to include PII in a GDPR friendly way on the Blockchain.

Audience poll: In the recent PwC study “Asset Managers: How to win with AI in 2019”, there was a concern re technology skills shortage gap. Do you believe that this is an issue?

79% have gone for "Yes for my organisation and for the wider industry."

Cost will be a continued focus to drive automation.

Also, anything that can improve the investment outcome.

Transparency and real time date more important to millenials.

15:20 - Parallel Panel Discussions - The Future of Fund Distribution

Moderator: Fabrizio Zumbo, Cerulli
Panellists: Paul Price, Morgan Stanley Investment Management;
Lory Kehoe, Consensys;
Henning Swabey, Calastone;
Lorraine Dunbar, JP Morgan

Live comments

16.30 Panel Discussion: Brexit​

Moderator: Deborah Hutton, Eversheds Sutherland
Panellists: Prof. Federico Fabbrini, Brexit Institute DCU;
Senator Neale Richmond, Fine Gael;
Chris Cummings, The Investment Association;
Eve Finn, LGIM Ireland

Live comments

The final panel of the day covers everyones favourite topic - Brexit! At least it's not all over the news for now.

A well qualified panel. Will be interesting to see what direction it takes.

First question - what is the current state of play?

Amazing that today the UK is taking part in EU parlimentary elections. Crazy when you think about it.

Election results can have a significant impact on the path forward for Brexit.

If Labour/Conservatives can hold ground they may be able try a 4th attempt at getting Brexit through.

If Nigel Farage's Brexit party has a landslide win then the potential for a no deal Brexit is a realistic outcome.

What are the Irish Government doing to offset the risk of Brexit?

Since 2014 the Irish Government have been meeting to plan for Brexit.

Could be close to a no deal exit or equally a new referendum depending on the outcome of the upcoming elections.

A no deal crash out scenario is so bad for an Irish, UK and European community. From an Irish Government perspective we are trying to avoid that.

UK current EU elections are unique in that it's the first backward looking election.

Looks like Nigel Farage Brexit party will do well. Less trust in opinion polls than previously.

Liberal democrats who have identified as a remain party look likely to also do well.

Looks like end of days for current PM with details of her leaving office forthcoming.

Next Prime Minister will be decided by around 100,000 members of the Conservative Party. About 54% of the party prefers a no deal Brexit which is quite scary.

Could all lead to a General Election or another referendum that has increased to around 30%.

Possible to see a General Election followed by a referendum.

Brexit process has amplified the importantance of the Asset Management Industry in the UK.

Responsibility to protect the peace process in Northern Ireland.

Very close relationship between Ireland and the UK. Crucial that relationship continues.

If there will be a 2nd referendum and article 50 is revoked following a remain vote, what will this do to the position of the UK in Europe?

Options for this to happen are limited.

Huge clamour from the younger generation looking for another referendum.

They are asking my questions - are there any positive outcomes from Brexit?

LGIM chosing Dublin as a base was a good outcome. Announced in 2013 that Dublin was being setup as EU HQ. One of the early firms applying to the central bank as a Super Manco. Lenghty, challenging process.

Evolution of the requirements as the volume of applications increased.

Important for the European Asset Management Industry that across Europe we continue to work closely to serve European savers.

17.10 Closing remarks from Pat Lardner, Irish Funds

Live comments

Pat summarised up the day's events.

Mentioned an increased focus on promotion at the Department of Finance.

Leaders panel discussed how serveral new companies, including their leaders, are here in Ireland which is important.

Ed Sibley mentioned over 1,100 new funds approved in 2018.

Pat didn't get to most of the panels but collaboration was a keyword that came up from people he spoke to.

That's a wrap. I hope you find the blog useful, feel free to share. I'm off for a sparkling water.