The fund management industry needs to take a leaf from the book of large corporates and promote tech-savvy figures to the boardroom to adapt to the digital world, a report by a funds transaction network group says.

Fund managers are off the pace in using technology to get their wares into the shop window and must heed lessons from how some of the world’s largest corporates operate, although there are signs that the financial sector is getting the message, a recent report says.

Calastone, the international fund transaction network, recently unveiled a white paper document called The Accelerating Power of Technology: Lessons For The Future Of Fund Distribution. It notes that blue-chip UK-listed firms, for example, are adding technologists to their boards to drive change. Fund managers must follow suit, it said. 

The firm analysed the composition of corporate boards among FTSE 100 firms and found that the number of technologists present in leadership roles in firms rose to 24 this year from just four in 2011.

Calls for technology experts to be present on company boards in the wealth management sector have been made before, particularly as the rise of fintech, and challenges to traditional business models, have taken on greater urgency. In 2015, the UK financial regulator said that a missing feature from far too many wealth management firms’ boardrooms is discussion of what they mean by technology and their operating platforms; too often tech issues are delegated lower down the management chain. (The point, made by Robert Taylor, head of the investment management department at the Financial Conduct Authority, arose at the 8 September Breakfast Briefing event in London, organised by the publisher of this news service.)

Signs of progress
There are signs that parts of the financial sector are starting to get the message about appointing technologists to the top rank, rather than just hiring token “techies”. Calastone’s white paper said banks and financial services sector firms are starting to follow; three out of the 10 companies listed on the index have a technologist present at either board or leadership level, roles that did not exist in 2011. The role of chief data officer represents 2.2 per cent of technologists at senior management level. 

“As a financial technology company with technology at its heart, and with a unique position in the funds industry, the trends we have highlighted in the research are critical. The paper demonstrates the need for a cultural change to ensure technology issues are firmly part of the long-term strategic agenda," said Jon Willis, chief commercial officer at Calastone.