WOOD ENCOURAGES INNOVATION AT SCHRODERS.
Charlotte Wood, head of innovation and fintech alliances at Schroders talks to Shanny Basar about keeping the almost 200 year old firm at the leading edge.
Schroders, the UK asset manager, has a history going back to 1804 but is looking to the future with Cobalt, an in-residence start-up program, and a scheme to encourage in-house innovation.
Charlotte Wood, head of innovation and fintech alliances at Schroders, joined the asset manager in 2017 to launch the innovation team. She had previously worked as a consultant at Elixirr, a small boutique, where she saw financial services clients becoming increasingly interested in innovation at the time of challenger banks and disruption.
She said: “I set up the innovation practice in San Francisco to connect financial services clients to start-ups and venture capitalists. I brokered introductions for Schroders, who were the first asset manager I met who had a genuine interest to work with these new companies.”
In addition to developing a strategy for external innovation, Wood’s role at Schroders also involves encouraging innovation in-house. “We wanted to harness the expertise of the Schroders teams to encourage them to post ideas in an innovation lab,” she added.
For example the Schroders Go chatbot in Asia was developed from an internal idea. Wood said Schroders Go was the first chatbot from an asset manager in Asia and allows intermediary clients to ask questions about Schroders’ funds.
In 2018 Schroders launched Cobalt to help fintechs collaborate and to assist their development in solving challenges in asset management.
“The Cobalt program allows Schroders to work more efficiently with start-ups that have a product we need and require help in working with a regulated entity,” Wood added. “They are given access to our offices and we establish a flexible framework so our teams can provide fast feedback.”
Sentieo became the latest fintech to join Cobalt in April this year.
Alap Shah, chief executive of Sentieo, said in a statement: “We know only too well the challenge that investment analysts face: working through overwhelming information to find that one key data point that may make or break an investment thesis. Our platform provides artificial intelligence-driven tools and a research management system that enable analysts to spend less time searching and more time using insights to deliver better investment strategies.”
Sentieo uses natural language processing to enable analysts to collaborate and make quicker investment decisions.
Wood said: “They were just launching in London as we became interested in the product. Sentieo has been rolled out across our investment desks and we have received good feedback.”
The first fintech to join Cobalt was Qwil Messenger, a chat platform which allows firms and clients to communicate directly through one app.
“We learnt a lot about the importance of communication from having Qwil Messenger as the first firm in Cobalt,” added Wood. “They are an excellent team and have been super responsive.”
Wood said Schroders has ambitions to expand Cobalt into the fund manager’s hubs in New York and Singapore but needs to find companies with the right fit and that would benefit the firm.
The Covid-19 pandemic and the need for staff to be able to work remotely has highlighted the importance of technology.
“Covid-19 has accelerated technology trends that were already in focus such as the need for data and analytics, automation to increase efficiency and digital client engagement,” said Wood. “Schroders benefitted from investments into technology in the last few years so the transition to remote working went very smoothly.”
She is currently reviewing which parts of the business are being most affected by Covid-19 and continued that this may lead to a small shift in emphasis to collaboration tools and more digital client engagement.
Wood said that one of the issues early in her career was the lack of visible role models.
“I worked at a consultancy for four and a half years and not a single woman took maternity leave,” she added. “I always look for opportunities to be more visible as a role model.”
She acknowledged there has been progress on more women entering finance and technology as hiring practices are much more equal, particularly at graduate level, but highlighted that companies also need to focus on supporting and retaining the women that they have.
To encourage more girls to study science, technology, engineering and mathematics, Schroders has been working with the charity STEMettes and sponsored more than 20 girls to gain an agile qualification.
“Participants also came into our offices, had workshops with different teams and got advice and insight into jobs and qualifications,” Wood added.
In May this year Schroders also announces a three-year partnership with IntoUniversity, an educational charity which provides local learning centres to support young people from disadvantaged backgrounds to attain a university place or another chosen aspiration.
Another barrier for women in technology is the difficulty of raising finance for new companies. Only 3% of venture capital went to companies led by a female founder according to a report from Crunchbase last year.
“There is a cognitive bias to overcome in fintech in funding female-led companies, as well as finding and hiring female talent, but research has shown that companies with a female founder perform better than those with male-only founding teams so there is a commercial incentive,” said Wood. “Venture capital firms have the most power to make change in funding for female founders and there are often diversity issues in investment committees.”