ISITC Industry Forum - A Look Back

The ISITC conference in Boston's Seaport District has come to a close. The event was filled with interesting conversations regarding where participants see operations at investment management managers heading in the near future. Being a first time participant, I was impressed to see such a high level of collaboration between attendees representing a large swath of the industry including investment managers, service providers, and industry vendors. Of all the conference's compelling panels, there were two, in particular, that I believe were very thought provoking.

First was the discussion around blockchain and the vast possibilities this emerging technology could have on our industry. This topic was discussed at great length by the keynote presenters, Michael Casey (from MIT's Media Lab's Digital Currency Initiative) and Paul Vigna (reporter from The Wall Street Journal), who were immediately followed by a panel who delved deeper into the topic. The message I heard was that the potential for this technology is essentially limitless, however, there are many hurdles to overcome that our industry needs to tackle before any level of adoption, even minimal, is realized. Many projects are underway to test the capability, and even find applicability, of the technology, so there is plenty of trial and error taking place. Therefore, true adoption of this technology is years away. That said, there is plenty of momentum and energy behind this as all who talked about it definitely believe blockchain will be a game changer, regardless of the industry.

The second notable presentation was led by Suzanne Duncan, from State Street's Center for Applied Research, who discussed the recent results of her research with asset managers across the globe. The research is titled, 'The Folklore of Finance: How Beliefs and Behaviors Sabotage Success in the Investment Management Industry,' which sought to take an in-depth look at the standard measure of success for investment professionals. In summary, the research found that there are flawed beliefs and behaviors pervasive within the industry that don't align with the views of what success means to the investors they serve. A very eye-opening disconnect exists, based on her findings, of what investment managers believe success means to them (performance, profit, meeting earnings expectations) versus investors. In the end, Ms. Duncan believes that investment managers need to radically change their idea of success and refocus their sights on investors by helping them achieve their long term goals versus the inward looking view of what success in the marketplace means to them. If investment managers don't change their behaviors, then the result will be disengagement of the investor from these managers. In the end, these investors will look to other avenues to manage their money (i.e., robo-advising), which will flip the existing model on its head.?

Time passed quickly over the course of the three-plus days here at ISITC in Boston due to the rich conversations we engaged in on evolving operational, technological, and regulatory challenges. We look forward to ISITC's next conference and the continued industry dialogue.