Imminent developments in technology will change the funds investment world, and the industry must be ready to adapt, according to a speaker at the Association of the Luxembourg Fund Industry (ALFI) Spring Conference.
Keynote speaker Mark Stevenson, author of An Optimists Tour of the Future, predicted that technology will create “a very different investment world”.
He compared the industry to the car insurance sector, which will have to its business model to cater for driver-less cars, and competitive athletics, which is being altered by the fact that prosthetic limbs could give competitors an advantage.
Stevenson also pointed out that, although technology exists now and is incredibly expensive, advancement leads to increased production and therefore lower costs. In the US, solar power will prove cheaper than using fossil fuels in 47 states by 2016, he said.
As more take control over the use of their investments, they will “change the very definition of wealth”. If investment firms are not perceived to be up to the job, then clients are likely to take matters in to their own hands, if they have the facilities to do so.
Stevenson argued that the firms that will survive this new normal will be those that innovate now. The problem, he said, is that many actually want “the appearance of innovating without changing anything”.
He pointed out that none of the large technology-revolution companies, such as Google, eBay and Paypal, were founded by people already in the industry, asking: “Why is it that [investment] firms know this but can’t change?”
Finally, Stevenson argued that both within the industry and outside of it, technology should be adopted to help improve the world, and that resisting it will only make the changes more difficult.
