Redefining the Future of Capital Markets
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Redefining the Future of Capital Markets

By Robert Kubin, CEO of Asset Management, PZU

A year back, in September 2018, Robert Kubin joined PZU as a Chief Investment Officer and soon after went on becoming the CEO of Asset Management. Since then, Kubin has been managing the internal and external assets of the company alongside dealing with the local and international business development. He also internally organized asset classes in scope on topics of money market instruments, government bonds, corporate bonds, equities, real estate, private debt, EM debt, macro long-short strategies, IR, FX and equity derivatives. Kubin has successfully put in his knowledge and expertise to help PZU publicly trade on Warsaw and Frankfurt stock exchanges, approximately USD 10 billion market cap, A-/Positive outlook rated by S&P, operations in Poland, the Baltics and Ukraine, life, non-life and mutual fund assets.

Capital markets are rapidly evolving, necessitating the need for adopting emerging technologies and applications for better business performances. As a part of extending their outreach and driving new revenue opportunities, market players are in search of capable technology infrastructures to create competitive disruption. By leveraging the power of cloud computing, AI, machine learning, RPA and blockchain, enterprises are reinventing their infrastructures for a digital age while ensuring that the most fitting technologies are being deployed for the best practices.

How is digital technology changing the way capital market enterprises function? How is it up scaling the market?

There is immense pressure to digitalize every part of a decision-making process in investments, which is enabling us to use more tools to initiate the change. By reducing the judgment in decision making processes and translating them into numbers makes it easier for computers to decide on an outcome obtained from facts and figures and is not questionable. This removes the loose ends, biased thoughts from the decision-making, and reduces the complications while comparing two sets of numbers. Through digitalization in decision-making, we can steer clear of the wrong decisions based on judgment and have a thought out strategy to ensure productivity.

How do you go about implementing the best practices and help organizations gain momentum moving forward?

First, as I said, remove the biased opinions and make decisions based on facts and numbers. There is a lot of room for internal and external communication within the organization in the investment decisions. Previously, traders and platform managers connected through emails or face-to-face meetings. So when a trade needed to happen, the manager instructs the trader on what is to be done and once that is executed, the platform manager gets a notification that a trading has happened. However, now these processes are automated and we have systems to take care of the tasks.

"Organizations and the people need to be open minded about the way technology works and understand that it bears fruit over the long run"

Currently, the platform manager enters an order which is delivered to a trader over the platform. The trader can access markets using the platform and with the right tools, execute the process and settlement. There are common platforms and software for optimization, capital strategy and various other functions, which takes care of capital consumption and delivers efficiency. While choosing an appropriate solution, features such as cost-efficiency and its ability to cut down insignificant headcounts must be noted. Moreover, the product should be able to help organizations focus on their main goal- up scale the business significantly. There are a lot more of tasks which have great potential to be run by automation and it will be just a matter of time that we see the change happening.

What are the best investment practices to follow while deploying digital technology at capital market firms?

We are a growing enterprise and not a global leader. So we look at the best products in the market and see what is the trending technology implemented by the bigger enterprises. Then we examine the functioning, discuss it with a few of the providers, do an RFP and choose the best digital solution.

An important thing that enterprises need to understand is that not one size fits all. Some solutions might work well for a particular company whereas some others might be suitable for the smaller companies. It also depends upon characteristics such as the budget and how much the company is willing to spend on data, how quickly they want to implement the solution, and what needs to be optimized. Therefore, it may not be possible for a single solution to meet all of these requirements.

What advice would you like to give your peers and the aspiring leaders in the capital markets industry regarding the deployment of technology?

Organizations and the people need to be open minded about the way technology works and understand that it bears fruit over the long run. There might be instances where the technology might benefit a company than the employee, which needs to be communicated within the organization. The users need to be aware that the technology that they are using is a good fit for the organization as a whole.

Leaders need to foresee the future and think of the advantages that the technology can provide for the coming times. Finally, you need to have people who understand that they are not just a small part of the technology. It is good to have people who are skilled in both management and technology on board. It is difficult to find people who bring in their experience in both as their years of career brings along their specialization on a particular field. The crossover of functions helps in connecting the different parts of the company to work together toward a common goal which is quite important.

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