Please introduce yourself and a little bit about what you do, and how you got to where you are now.
My name is Ross Milward I am the co-founder of Quantifeed, I founded the company with Alex Ypsilanti and we have been around for about 3 years now. I guess itâs been a long journey; my background is technology but I have been in finance for a long time, in Hong Kong, London and Australia, primarily in front office equity technology risk and trading. More recently, after that leg of my journey I decided it was time to try something different, the timing of that decision was fortunate as Alex was in a similar situation, looking to do something different too. We felt there was a good combination to bring his quantitative research skills and my technology skills together to build a product where we could take our learning from our investment banking experience at an institutional level and turn it into a product that was appropriate for financial institutions and their customers in Asia.
What things are you doing differently in the FinTech space - both in Hong Kong and from a global/regional perspective?
From day one we realised that the approach for us would be a B2B proposition for financial intermediaries that they could then on sell the product and the content to their customers. So ultimately a B2B2C model. We felt that was the strongest proposition for a number of reasons; the fragmentation of Asia in terms of geography, in terms of style of investors in each country, as well as the various regulations that exist across the Asia Pacific Region. So from day one we always had that mindset and fortunately thatâs worked very well for us, especially now that there is more awareness of digital wealth management, robo-advisory and thematic investment, itâs clear that at least to us our B2B model is the right approach, in this region, for the style of product we do.
What advantages / disadvantages does HK have in FS to disrupt and take models to go global?
A big advantage is that Hong Kong for us is home, and the reason it has become home is, number one, our existing careers in Investment Banking and that Hong Kong and Singapore together, although for different asset classes, is really the centre for Asia for finance, so I think a lot of the experience and learning, people and networks are here, and thatâs been a big benefit.There has been good focus on FinTech too, for example when we started 3 years ago it was the very beginning stages, with strong support from Cyberport, and the Hong Kong Government is now realising that FinTech is an important piece in the puzzle in the finance industry here. Secondly it's easy to set up a business in Hong Kong which makes the initial entry easier than other countries. The disadvantage is mainly the lack of technical skillsets, there are some very good people that but more often than not in financial services in Asia, technical skillset requirements are used more for integrating existing software or taking global systems and deploying them into Asia vs. greenfield architecture and development, I think that's changing somewhat, but of course, it's your job to help us find those kind of technically savvy people!
Is the FinTech disruption business model led, or technology led? What do you think of the tech giants? Do they pose a threat?
For me the foundation has to be finance and technology so for me as the tech guy here it was important for me, when we started, that there was the content, the product and the research, not just the building of a piece of software. I feel that has played out well, so I believe some of the existing tech giants can do technology very well but at the end of the day you need the financial experience too and we feel this is an edge we have. I think it will change over time but the big players are used to acquiring expertise to help them build products they didnât have before.
What are some of the biggest challenges you have faced while setting up and growing Quantifeed?
The main challenge is everything takes longer than you would expect. When you come out of a bigger firm with a brand like the banks we were in, then you take that brand for granted, for example when you are speaking to potential customers then they are looking at that brand, not just you. So, when we stepped out of that world, Alex and I had to initially rely on our personal brands, but over time we fairly quickly recognised how to build the credibility and brand image of Quantifeed as a company and also the broader team that helps make Quantifeed a good company. That takes time but I think thatâs been a big and worthwhile learning exercise. The other big aspect is execution; its easy to have an idea but its very difficult in may ways, not just from a technology perspective, but its very difficult to get something truly to market, to the point where customers are using it and truly relying on it day in day out, particularly in financial services.
You mention how important the team is to brand building, so in relation to the war on talent what is the ultimate skillsets in a FinTech co-founding team? What kind of hires do you look for when building up and scaling your team?
It has been refreshing hiring in a FinTech company vs a traditional Investment Bank as you end up getting exposure to a broader set of developers who don't want to work in a bank for what ever reason I think in terms of the team we have a combination of people who've had perhaps more senior experience, or experience trading or working in connectivity in banking etc., but we make sure we are flexible enough to bring in people who can learn the parts of finance we have too. Therefore, ultimately, we are looking for people who are interested in and passionate about learning new things, these are key criteria for us.
Tell us something that nobody else agrees with you on in the FinTech space
Hmmm, it's hard to come up with something no one agrees with, maybe it's a cop out but execution and time to market is something that people underestimate rather than disagree with. As I said before execution is key and it's easy, particularly for the overused term for robo-advise, it's easy to have a PowerPoint, it's easy to do some of the simple algos, but then actually if you include what is required within a financial organisation to go live, it's a very big undertaking. I think a lot of people miss the important pieces in this regard. The other aspect, going back to what I said before, is that maybe people coming from a financial institution background underestimate the technology and those from technology who maybe don't have the experience on the financial side underestimate the finance piece. This is where you end up having issues, therefore the combination is critical and perhaps this is where people might disagree with me? (chuckles)
What are some of the biggest opportunities in the FinTech space at the moment, and what advice would you give to someone looking to get involved now?
You have to be careful that itâs not overhyped; I think people shouldn't be attracted to it because of the disruptive aspect as disruption takes a long, long time. To me, where FinTech in Asia really adds value is how we can partner with existing institutions who know there's a change, who can add value to existing business through technology and supplement some of the existing products, and over time, take a digital wealth management journey. It is important that people who are looking to get into FinTech recognise that it takes time to build the experience but the nice thing about it is that you are playing both sides. For example, what's really interesting is when we are building the technology and thinking about the architecture, we have to think how we scale our platform across the cloud because there are many institutions who are either smaller or the in the right jurisdiction where they are comfortable with the cloud, then we want to scale them as quickly as possible and on-board them with the cloud. However, some of the bigger organisations are still into enterprise technology and not yet ready to put their production systems on or the financial information of their clients that brings trust into play prevents this. So I love the fact that we have these technology problems to solve across the broad spectrum, it means we can use the latest technology, but at the same time we have to be cautious of overusing this latest technology. We follow Agile processes. Itâs great talking to my ex-colleagues about what we do and what we can do in the cloud, but we have to think about regulations, and when it comes to peopleâs finances then we have to have all the controls and security and the regulations around how we use this technology.
What do you think about the future of risk, compliance etc. in this space, will it become like the banks again and then will we really be any different to the banks?!
The regulator and the financial institutions have a huge responsibility in terms of looking after their customersâ money and making sure there is a level playing field in the market place. There has to be and FinTech companies can't ignore that, it's naive to think they can. There should be some reason to disrupt but I think having said that there is optimization and improvement and bringing some more nimble practices from FinTech companies into existing institutions is a big benefit for existing institutions and bigger institutions are getting more and more competitive, either in investing or partnering with smaller companies that have that expertise or are more nimble at getting products to market. This always has to be done with the right constraints around regulation and control and certainly for us at Quantifeed we take Cybersecurity very seriously; we spend money on it and it's part of our proposition when we sell to these intuitions, we make sure we have everything in place that is required from their side.
A broad one to finish. Where do you see the future of FinTech going?
Yes, a very broad question! Certainly, we are at the start line of a very long journey, not just FinTech but when you start to think about robotics, AI, what computers are good at versus what humans are. Computers are very good at analysing huge amounts of data, identifying patterns etc. that humans cannot, I think it was about 13 years ago that a computer beat a chess grand master but now its taken for granted that computers generally can do this kind of thing and for every industry over the coming decades there will be more disruption around what computers will do, what is on the horizon for MedTech too for example and the robotic aspects of surgery etc. But humans are surprisingly predictable, computers as they get the data can certainly augment humans in terms of providing information to help provide better-informed decisions in the areas of wealth management and wealth planning too.