Philippe Renard (RBC I&TS): sublime intimate data
A chemical engineer by training, Philippe Renard then moved into the back office, then into risk as a CRO before becoming CEO of RBC I&TS. An atypical career guided by an unquenchable thirst for learning.
What goals did you set yourself when you were appointed CEO?
I arrived at a pivotal moment. We are coming out of 10 years of growth, but we are at a turning point, where asset managers and asset servicers are now under pressure due to digitization of our industry and cost pressure increases. We are not immune to this trend. Our clients are asking us to become more efficient to help them to be more efficient in turn. To do this, we have three main options. Firstly, operational efficiency by automating processes and digitizing interactions with clients. Secondly, organisational design, which allows us to define which of our locations are the most appropriate for each activity, taking into account language, cultural compatibility and the ability to support our customers. And finally, the customer experience, which includes themes such as supervision, opening of investor accounts, support in the launch of new products, relationship management, etc. This all allows us to differentiate ourselves from the competition.
"Our clients want data intimacy Philippe Renard, CEO, RBC I&TS"
What role does data play in your strategy?
In a word: central. RBCI&TS serves one-third of the Luxembourg alternative funds market and is the second largest transfer agent for Luxembourg UCITS funds, far ahead of the competition. Our vision is to offer end-customers of funds and distributors the service-experience they demand, with easy, direct access to their data online. A second dimension focuses on data management. Some asset managers want dashboards to be able to better visualise different indicators and make better informed decisions, allowing them to focus on what is important. Others ask us to compare their data with public information to create benchmarks to help improve performance or make decisions about future products - country of launch, type of product... The more sophisticated clients want 'data intimacy', i.e. a very strong integration of our respective systems, which thus allows them to access their data directly in real time, enabling them to use their own tools to perform analysis. This last point creates enormous added value by facilitating very strong and regular relationships that ultimately guide our own local, regional and global strategy. To meet these challenges, we rely on our experts and sometimes partner with fintechs. For example, we recently announced that we are using the cutting-edge analytical technology provided by BestX to launch our Transaction Cost Analysis (TCA) service for our Currency Overlay Services (COS) clients. This will provide RBC I&TS COS clients with independent reports to monitor and evaluate the quality of execution of their currency hedging transactions.
How do you see your industry changing in the coming years?
I see three main trends. Firstly, alternative investments, which are growing at 8% according to Boston Consulting Group, four times the 2% growth rate of UCITS. As RBC I&TS has a very strong footprint in this segment, we are making it a priority in our strategy. Then there is the digital factor, which allows us to increase efficiency while controlling costs. But there is still a long way to go! Take Swift messages, for example, which added considerably to automation in financial services in the 1980s. The structure of the messages is fixed and is still based on the need to work with constraints that were solved decades ago. In particular I am thinking of the old challenges of the cost of the CPU and the difficulty of extracting data from databases that limited the number of data fields to less than 50. Today, customers want to have more richness in their interactions, with up to 200 possible data fields with options to change the structure at will. New technologies are setting new standards for efficient and focused communication between different actors, allowing us all to focus on the essentials. The third and final trend is the need for reskilling and upskilling to support the transformation of the industry in a difficult cost management environment. Traditional managed funds are struggling to justify their entry fees given their performance compared to a simple tracker, and this explains much of the pressure on costs and the sharp increase in investments in passive ETFs or alternatives. Early movers such as Vanguard and Blackrock are doing well, but asset servicers are facing a need for huge volumes to compensate for tiny margins. Add to this, low interest rates and little visibility on short or medium term growth. McKinsey estimates that a third of the world's banks have profitability of less than 2%. All these factors require a great deal of pragmatism on the part of governments and the regulators, who must facilitate the transformation of the population's skills. This is a global challenge, but I am an ambassador for this culture of positive change. A chemical engineer by training, I moved into the back office, then into risk management and operational risk, and now I am CEO. The common thread in my career has always been to question myself and dare to learn. This approach allows me to face the future with confidence. We have everything we need to meet the challenges of the future.