Building a successful Fintech for the Asset Management industry

We have spent many years building our business here at Kurtosys, specialising in how our platform can provide better digital and document outcomes for the asset management industry. A great deal of learnings along the way as the industry, the availability of technology and the overall “product/market” fit of our proposition unfolded.  Where we originally started out, to how we have ended up has been anything but a straight road. As if looking up to the very summit of a snow-capped mountain and imagining flying straight to it, we very much appreciate that the reality is a zig-zag trail that oftentimes felt like we were travelling away from the summit as opposed to towards it. Suffice to say, we remain on this trail. One thing that many outside observers have not had direct insight of is that Kurtosys has been helping our customers in asset management for nearly two decades. Our SaaS Platform (of which 95% of our customers are on), is a culmination of many years and hundreds of projects educating ourselves on the problems and challenges our customers are facing. We have been laser focused on the relative priorities of these problems and how best to use technology to solve them.  

In the last five years, we have developed a new platform from scratch and one which incorporates all our thinking and experience over the preceding years. We used the very best enabling technologies, reconstructed every facet of our company (more than 90% of our staff have joined in the last five years) and provided the industry with a much-needed solution. A solution that dispels the myth that sales, distribution, marketing and client service cannot be supported by a single content store to power the many omni-channel digital and document needs of a complex and highly regulated industry.  

I wanted to write down a few of my experiences over these last five years which I have learned and perhaps allows me to give some advice to those individuals and teams who are setting off, or at the early stages of building something that they feel can help bring change in this industry – your timing could not be better but I would feel somewhat humbled if any or even one of the following points resonated to some degree. It may help you get to your goal quicker than perhaps we did at Kurtosys: 

Product/Market fit: Be deeply introspective of the proposition you are building and the appetite of your solution to the persona you are trying to convince. Is there a “C-level” persona (asset management remains hierarchical) that would say “I like that, lets do it” or can you at least imagine a C-level persona saying that of your idea.

Addressable MarketAsset Management is a global industry with trillions of dollars under managementBut remember, the bigger the better and the industry is consolidating There are perhaps 400-500 sizeable firms with assets over $50bn and, save these firms, there is a long tail of many thousands of “boutique” firms. Unless your product is “low touch”, selling to the tail could be an expensive and resource hungry exercise and you will be targeting customers where spend on technology remains something that is challenged internally. 

NicetoHave or MustHave? Be honest with yourself about where you sit with your proposition with regards to this question. Must-have will be more successful than Niceto-Have in the short term and a Nice-to-Have could one day become a Must-Have if, for example, your proposition is correctly predicting a change in industry structure, regulation or market dynamics. Irrespective, make sure you understand where you are at with this. It will help you decide how you apply investment in productsales and marketing. 

Long Sales Cycles: Enterprise software has inherently long sales cycles. Asset management is no exception and I would go as far as to say that it is a difficult industry segment to sell technology. The larger firms have many stakeholders and even if your proposition is for the “business”, the regulatory, compliance and general sensitivity around issues such as data protection will mean that your “business sponsor” will need to traverse many departments to make sure all the I’s are dotted and the T’s crossed. Budgets are never as simple as they appear, and your proposition may be funded by multiple budgets and budget owners. This will consume time, patience and management bandwidth on your part. 

CompetitionThe market for Asset Management technology or technology enabled services is dominated by large software/outsourcing firms. Most of these firms will be doing or claim to be doing what you do. Your prospects will remind you of that. It is likely your prospect uses one of these firms as an incumbent. This is your opportunity to shine. You have a real technology solution and one where you are not relying on lots of people in offshore/low cost centres to support your tech. It’s hard to dislodge incumbents but I have seen a steady trend of buyers looking at innovative and new market offerings as a better way forward. The approaches that new or modern technology provides, allows them to achieve the aggressive targets that the industry is now setting itself. You don’t need to knock the competition; you simply need to contrast your proposition against theirs. 

Cross-border contention: Most asset managerscertainly the largest 400-500 are global. Finding project sponsors, owners or even the person “behind the veil” is hard. I have seen EMEA (Europe Middle East and Africa) projects run and sponsored out of Head Offices in Californiaand US projects run and managed out of London. Be prepared for formal project governance, lots of worldwide participation and a healthy share of differing agendas and priorities. 

Service vs Technology: Get your model right. This is a demanding industry and has grown up being supported by outsourced or tech enabled services but not SaaS (Software as a Service). The difference will not be lost on you but is often tough for your customers to appreciate. It is highly likely you are “disrupting” the norm – you bring technology and automation and are replacing outsourcing and tech enabled services. At Kurtosys, we disrupted ourselves. It has meant that customer training, support and professional services are as important – if not more so – than your platform. 

24/7 coverageYour customers will typically operate a business model that follows the sun. Unless your platform targets a very localised problem, it is likely you will have to provide 24/7 service. This is challenging to do as a start-up. It’s challenging to do properly as a maturing company never mind a start-up. But investing in the coverage or certainly having a plan to do so could make the difference in getting the deal. It is of critical importance to your customer.

Security/ComplianceYou will rarely meet an asset management technology team that does not have a lot of information security knowledge and horsepower. Be prepared in your engagement with these folks. They see hundreds of vendors and have spent considerable time putting together policies and processes that protect their companies and the investors they serve. Being flippant about their needs can and will cost you a deal. There are few short cuts and flippancy is not suffered gladly. Even your business sponsors may not understand the level of scrutiny that you will be placed under.  Its is your job to make sure that the feedback to your business sponsors is transparent – where you are with the due diligence and the challenges you are encountering. My advice is: Infosec reviews are there for everyone’s good. It validates your platform and holds you to task important aspects of your technology. You will also find that most Infosec reviews expose a few gaps in your processes – take the feedback from the Infosec review positively and use it to become betterIt will not necessarily prevent you from signing a deal, but you will be required to provide a plan of how you will resolve or address issues or perceived deficiencies. 

I would like to close by saying one thing. I enjoy what we do at Kurtosys and how we work with our customers to better the industry. All my points above are words of advice and to be taken in the positive spirit intended. If you do that, you will find yourselves working in an exciting segment where there is a deep desire to improve and where there is much change going on. You will engage with a lot of executives who know and want the industry to thrive but equally know that the industry needs to change. At the end of the chain is a saver who is relying on them. A perfect hunting ground for your disruptive start-up.