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Investors lack agility because the IT landscape isn’t in the right shape: In conversation with Simon Callan

Investors lack agility because the IT landscape isn’t in the right shape: In conversation with Simon Callan

We chat with Simon Callan, CTO at Impactive about his passion for technology, what brought him into the ESG investment world, and his observations about the challenges and opportunities asset managers are facing in the tech space.

Impactive Team
June 29, 2023
Hi Simon, tell us a little bit about yourself and your career so far

I’m just a straightforward guy from the north of England who loves life, family...and tech! I grew up in a household where helping out was expected and sometimes paid for which gave me a strong work ethic to always try to improve and do things faster and better. I was exposed to technology from a young age through a home computer (Acorn Electron) and programmes like “Tomorrow's World” which fuelled my interest and passion. Fast forward a fair few years and I’m now living happily in London with my wife and 2 children, where we have a healthy balance of family adventures and business endeavours. In my career, I have followed a fairly well-trodden path from software engineer through to solution architect and now CTO at Impactive. I have worked at and with many different companies during my career, especially within the financial services sector, and have made many great memories with many great people in some challenging times along the way. Problem-solving and innovation are what drive me and excite me, especially at the dawn of this new age. At my core, I’m an engineer first who also has acquired a few additional duties and takes in his stride, with excitement, whatever comes next!

How did you get involved in Impactive?

Good question, I’m wondering myself! I have just explained my love for problem and innovation so when Mais, my wife, started to talk more and more about the problems in the ESG, stewardship, RI and reporting space I couldn’t fight the temptation to ask - “What are these problems you are talking about and why has no one built something already? Is there even a market? It doesn’t sound so difficult to me”. Well, that was it, I listened intently, wrote things down, started drawing some pictures and went through the kind of process that I was used to from my 15 years or so of consulting. I am genuinely interested in the investment industry anyway and have managed some of my own pension pot for the past 10 years so the basic language being used was somewhat familiar, however with lots of new acronyms thrown in too. I experimented with a couple of low-code solutions first before realising that the only way I’d be able to achieve our ambitions without constraints was to build from the ground up with help from some great developers to accelerate and standardise. Working as a husband and wife co-founder team with support from our network of associates and advisors has so far been a great experience and I’ve learnt so much from doing it. Mais and I are very much on the same page although we do obviously have healthy disagreements too. Our kids are sometimes blessed with the knowledge of Impactive when our conversations and ideas spill over to the dinner table.

As someone from a traditional tech background, what do you think about the responsible investment industry?

Like most new domains it comes with a lot of new acronyms, standards, regulations, drivers and business activities. My first observation was this area is very data-heavy - almost overwhelming - and I sometimes wonder how the portfolio managers, analysts and reporting teams even make sense of it all to make important decisions. Another aspect that I have been wrestling with for a large part of my career is that of end-user computing, using spreadsheets, Access databases, and other ‘systems’ to store records and create reports. I honestly thought it would be more sophisticated, hence my surprise that the problem wasn’t really solved in the first place. I have sympathy because I know how technology transformations can overrun and under-deliver leaving the client-facing teams resorting to solutions that they have greater control over. Also, vendor products are sold well but can miss the mark on their actual usability and effectiveness. In the end, the challenges being faced and the type of solutions needed are not so unique, it’s only really the words, structures, behaviours and actions that paint the picture of one domain vs the other. So, I treated it as just another problem space that needs a solution and followed the good practices and learned experience to create something reliable that helps people.

When it comes to the industry itself I have now attended a few ESG conferences, read the principles, examined the reports, and have a good grasp of what is important. I see value in the entire ESG movement alongside the supporting codes and regulations that are shepherding the flow of capital and driving better behaviours by the corporate players. Part of me sometimes thinks it’s a bit too slow-moving and not necessarily operating the agile principles that we have adopted in the tech space. Perhaps that’s by design due to the scale of what is required and the ability to change at speed.

What do you see as the main problem asset managers and asset owners are facing on the technology front?

I see the same problems as I have seen throughout my career - data siloed across disparate, disconnected repositories, legacy systems that haven’t aged so well, under-resourced and -equipped IT teams, a patchwork of end-use solutions and business teams under pressure to service their clients and adapt to regulations. I also see that there is a lack of standards on data contracts for the flow of information from asset managers to asset owners. The main problem I see for asset managers is that they don’t necessarily have the agility they need to meet new demands because the IT landscape isn’t in the right shape. I have been through several multi-year transformation projects at some of the biggest banks in the world where they embarked on a journey to modernise their technology platforms so that they would be able to have the agility they needed, when they needed it rather than all their IT spend going on “run the bank”. Mostly these were successful, however it requires a large budget, strong team, and stakeholder commitment to go the course and achieve the desired outcomes. Luckily, every year things are getting easier to create sophisticated and tailored solutions with many more success stories to point at.

Asset owners have a different set of concerns and customers, relying heavily on the asset managers to make consistent returns for their members and to help them report on their own specific goals. I’d say getting an accurate, complete and data-rich feed of data in a standard format from their asset managers is probably one of their biggest challenges apart from attracting new members and monitoring their asset managers.

What are your feelings about AI?

Well, the hype cycle is in full-swing and I have been keeping up to date as well as evaluating various different AI tools and the frameworks that you can work with in code. I really like listening to Elon Musk interviews on the subject and especially agree with his phrase - “the future's gonna be weird”. It’s so understated and we are definitely, as far as I know, going into unchartered territory. At the moment the underpinnings are based on machine learning, large language models (LLM’s) and functionality on top to give the appearance of intelligence however we are not yet at the point of real artificial general intelligence (AGI) which is where things will start to get, well, weird. I try not to think too far ahead about an AI overlord or terminator style apocalypse and instead see it as an assistive technology to be used more in a co-pilot kind of way, a smart helper that can enables you do things faster, spark creativity and gain insights over large amounts of data. It really is a great time to be in tech and to get into business, achieving things that would normally only be possible with a bigger team over a longer time frame. Having worked in a heavily regulated industry for a long time I tend to agree that some form of AI regulation sooner rather than later is necessary to manage the evolution of the rapidly changing space. We have ideas about how we could potentially enhance the Impactive experience with these new technologies and hope to have a proof-of-concept real soon.

If you weren’t in technology, what would you be doing instead?

I really love technology so it’s hard to think of not working with tech, however, I also love the outdoors, good weather, people, and music so I’d probably be doing bike tours or hiking in the day and by night some DJ’ing at a local beach bar, perhaps even a mega-club! Family always comes first so having quality time for them would always be the top priority.

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