For decades, the asset servicing sector has been Excel’ing from dawn to dusk to keep our assets safe. Estonian FinTech Depowise has built a powerful all-in-one solution that brings the asset servicing sector to the next level.
Living in the European Union, you probably collect a pension and send part of your salary to a pension fund each month. Usually, you would choose where to invest: ten per cent in European stocks, 20 per cent in U.S. companies, and the rest in real estate, for example. What happens to your money then? Who makes sure that your fund manager has handled it correctly?
Depositaries do. Surprisingly, though, most of their work is done the old-school way, in Excel. This 40-year-old software is powerful but not enough anymore, where data amounts have increased significantly. The world has changed as well. Since the collapse of the investment bank Lehman Brothers in 2008, the European Union has tightened its rules and oversight, leaving depositaries overwhelmed with paperwork and data, making them dream about modern solutions that can handle these data amounts and keep track of the transaction’s timeline.
Estonian FinTech company Depowise saves the day by automating most of the work of depositaries, leaving more time for research and less time on tedious number-typing, hunting lost evidence, or processing huge amounts of data to find mismatches.
Peaceful mornings with Depowise
“I now start my day with opening the Depowise platform,” says Jorge Fernandes, a Department Head of Depositary Bank Creand Wealth & Securities Luxembourg. “Depowise shows me the staff’s progress. I can see who has done, what and when.” Excel never had this feature – anyone could accidentally delete whole columns. Yes, people make mistakes, but we certainly don’t want to see mistakes made by depositary and to screw up things with our savings or pension funds.
“The databases that depositaries have to handle are enormous. We can make about 90% of this database work automated,” notes the co-founder of Depowise, Sven Peekmann. In the Depowise solution, the data flow is automated in the way that every number has to be entered just once, and it will be displayed everywhere in the system, from the funds register to the reporting module.
At Creand, every team member has a certain number of funds to deal with. Every new investment means that the fund managers must submit the data, which is a lot of manual work if you used to do it in Excel. Additionally, fund managers send documents to depositaries to check them and ensure that all the conditions are followed. For Creand, the Depowise solution allows for freeing up time from Excel-ing, focusing on the quality of the work, and servicing more funds.
According to the Depowise customer survey, the average efficiency improvement in the asset servicing companies that started to use the Depowise solution is 82% compared to their pre-Depowise times.
The all-in-one solution the market needs
Fernandes admits they initially asked Creand’s in-house IT department to create a more automated system as they couldn’t find a system in the market that could cover Creand’s needs. According to Fernandes, there were different technologies offering bits and pieces for asset servicing businesses but not the all-in-one solution that Creand needed.
“Turned out that our IT guys don’t know our business. We spent much time explaining what we needed,” Fernandes recalls. Then Creand found Depowise and its all-in-one solution for depositaries covering safekeeping, oversight, cash flow monitoring, and customer relations. “When we got the green light from the management, a new adventure started with Depowise,” Fernandes notes.
It could come as a delightful surprise for Creand to encounter a tech company that thrives not only in IT but also possesses a deep understanding of the asset servicing industry. Moreover, Depowise is the only service provider in the market that covers all the needs. “All the depositaries face the same problems, but there wasn’t any solution in the market when we started,” confirms Artur Reiter, the co-founder of Depowise. “There still isn’t!”
Modularity makes adaptation fast
Depowise modular architecture enables to adapt the solution to the company’s needs quickly, 3 times faster than in-house built solutions. Remarkably, if you compare it with similar solutions in the market, the Depowise setup has still been done at unprecedented speed, leaving competitors far behind.
The founding story of Depowise
The idea for Depowise came when Sven Peekmann and Mait Poska worked for an IT company and helped a Scandinavian bank to automate its processes. Building on that experience, they understood that depositaries had been left out of innovation. They invited Artur Reiter to join their team. After working at Bloomberg for ten years, Reiter had just returned to his homeland, Estonia, looking for new challenges. With Reiter’s global connections and Peekmann’s and Poska’s exceptional IT experience, they kicked off their company two years ago.
Since then, they have travelled around Europe and the UK, speaking and listening to the market and learning about their needs and problems. “We have met with all the big players of the sector and have got a seat at the table because we had something to show and offer,” Reiter explains.
They heard how chaotically depositaries work to this day. Some things are done manually, others automatically. Some solutions are bought in; some are made in-house. It’s a messy puzzle. When an asset servicing company wants to move its operations from one country to another, it takes up to two years to transfer the data. With Depowise, it is a few weeks’ task.
Even though it affects most people, depositaries are a niche market overlooked by big technology companies, the founders of Depowise have seen. Excel sheets and old-school reporting still stand in the centre of the sector. Not many people understand what happens inside these banks or their problems. At the same time, banks, too, crave to innovate and modernise – they have to if they want to grow.
As the workload grows, depositaries must hire new people or work smarter. Regulators check and require appropriate technology. All the data worth trillions of euros must be guarded well. Ultimately, it’s a question of safety.
The founders of Depowise decided to cover the needs of depositary banks as it’s a growing sector. “We want to become the dominant player in the market in coming years, which is evidenced by significant market demand,” Peekmann says.
To level up in any area, Reiter believes these three steps should be followed: digitalisation, automation, and innovation. “Everyone wants to jump to the third, but the first steps cannot be skipped. We are the company you can take this three-pillared journey on,” he concluded. “Ultimately, investing in technology leads companies to more profitability in this low-margin environment.”
“And to fewer risks,” Peekmann quickly adds.
Fear of regulators and fines
Depositaries are subject to strict regulation, with regulators conducting on-site visits to financial services providers.
When regulators come to visit Creand Wealth & Securities Luxembourg, Fernandes downloads all the data from the Depowise solution to show them in one go. It’s not just faster but also more secure, as now the regulators can see all the changes in data.
Following rules is much easier with a supportive solution for that, and much profit-friendly and future-proof as the finance company can take care of their unblemished reputation, which is the ultimate wealth in the finance sector.
Depowise solution makes operating transparent and easy for depositaries. “Everyone is asking for transparency these days,” Reiter says.
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