Focus on infrastructures for an innovative fund industry

Luxembourg’s fund infrastructure is fundamental to its success in cross-border distribution. Today’s challenges call for a unified and streamlined approach to data for truly efficient information flows.

Luxembourg has a long history of improving and growing the many links between investment fund actors and so enabling them to communicate effectively. It has also been in the business of cross-border fund distribution since the first UCITS directive.

All actors in the distribution chain need quality information delivered at the right time to the right recipient. In this context, cross-border information exchange, including data and document dissemination has grown with the industry and technology has played an important role in this growth. However, the amount of information needed by regulators, transfers agents, fund administrators, asset managers and many others –not to mention advisors and investors – continues to expand. All actors now wish to move to the next level. 

Digital transformation and the new fund industry

Now, one must consider information flows all along the entire fund lifecycle. Additionally, all participants are looking for, and expecting, real-time flows and access to this information. It is also a matter of cost pressures and cost effectiveness. A study commissioned by Fundsquare found that up to 70 percent reductions could be made in distribution costs.

With this in mind, an integrated, holistic approach is now needed. In the new digitally-transformed ecosystem efficient, user-centric data and information flows will become vital for fund companies.

It is important that this is done in an industry, cooperative manner to ensure scalability, cost mutualisation and, crucially, opportunities for value creation.