Managing director Mark Munoz spoke about how fintech companies are collaborating with private banks in the region and what their biggest challenges are.
Could you elaborate on your new platform and the technology it uses?
Contineo is a network that facilitates pricing and order processing between buy-side and sell-side firms. It is the WhatsApp of structured products! As our technology was developed as a set of standards for the industry, we are able to have all subscribers agree to a set of technical and operating principles in order to create a more efficient marketplace for standard flow products.
Contineo is much more than just a network – we’re an open industry organisation where all our subscribers can benefit and can help drive innovation for the network.
Our technology facilitates a unique set of data analytics that our subscribers can use for compliance and regulatory reporting. They can also see the performance of their business and what the overall flow for structure products looks like in Asia.
Why did you see the need for a structured products platform?
Currently, trading of structured products is a highly manual process, with most banks using Excel and email for pricing and trading. This leads to errors and is costly for both sides of the transaction. Through Contineo, we’ve managed to standardise the workflow. This has made it more transparent for businesses, compliance, relationship managers and others.
Who has signed up for this platform?
Contineo covers four of Asia’s top 10 private banks and six of the top 20 as subscribers, as measured by AuM. This is effectively 40% of the total market measured by AuM.
How receptive are banks to the products developed by fintech companies in the region?
Banks have embraced fintech companies as they look to automate processes and find technology that helps increase product distribution.
The challenge banks face isn’t working with fintech companies, but being able to adapt these technologies so as not to disrupt the running of the banks. Contineo helps banks achieve this by moving them from a highly manual, errorprone process to one that is simply online using a web-based tool.
The real problem is fintech companies sometimes don’t understand the bank’s processes, regulatory challenges, and the internal hurdles and timeframe it takes to adapt new technology.
Many early-stage fintech companies can become disillusioned with the process because of the length of time to move from proof of concept to production and the high costs of implementing and maintaining an application for a bank.
Contineo was able to work with regulators, investment banks and private banks prior to launching to gain an understanding of their problems before developing a solution that was eventually adopted and supported by the industry.
What are the main technological challenges that private banks face in Asia?
I believe there are two primary challenges for private banks in the region.
First, private banking is often based on tradition and building personal relationships with clients. However, the demographic of the client has shifted over the past decade to a much younger, more physically mobile and tech savvy individual. This new generation is online, uses social media, communicates more through chat than over the phone or face to face. Therefore, private banks must adapt technologies, processes and communication channels so they benefit and ease the burden for their clients.
Second, there is continued information saturation in the market. Long gone are simple research reports where a client has the time to consume and understand the information.
Now clients are inundated with information from every source point – online, mobile, television, streaming news services and more.
Private banks will struggle as they try to capture their clients’ attention with the most relevant information to ensure their clients make an informed and confident decision.
Are there plans for new products or services in the pipeline?
We expect to announce a major new service late in the second quarter of the year. We will also announce new payoffs to add to the platform at the end of the year and new subscribers who will join on both the buy and sell sides.
This interview was published in the April issue of Citywire Asia magazine.