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The Connector Podcast - Transforming Regulatory Reporting: How Qvonto Simplifies Compliance for Fund Reporting
Have you ever wondered how complex regulatory requirements can be transformed into user-friendly, visually appealing reports? Gain exclusive insights from Sinan Gabel, CEO and founder of Qvonto, and his partner Christian Lysholm, CCO, as they walk us through Qvonto's groundbreaking approach to simplifying regulatory reporting for clients in Luxembourg, Switzerland, and the Nordics. Discover how their end-to-end system manages everything from data transformation to generating high-quality reports, making compliance efficient and accessible.
On our latest episode of the Connector Podcast, delve into the technical prowess behind Qvonto’s solutions. Sinan and Christian explain the critical role of real-time data in maintaining the accuracy and relevance of their reports, ensuring that regulatory documents are compliant, easy to understand, and engaging to read. Learn how their system continuously monitors and updates reports, instantly adapting to underlying data changes. Don’t miss this fascinating discussion on how Qvonto sets new benchmarks in the fintech and regulatory sectors.
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Koen Vanderhoydonk
koen.vanderhoydonk@jointheconnector.com
#FinTech #RegTech #Scaleup #WealthTech
Welcome to the Connector Podcast, an ongoing conversation connecting fintechs, banks and regulators worldwide. Join CEO and founder Cohen van der Hooydonk as you learn more about the latest available trends and solutions in the markets.
Speaker 2:Welcome to another Connector Podcast, and today we've got Quanto with us. And please, gentlemen, can you introduce yourself? Hi?
Speaker 3:my name is Sinan Gebel. I am the CEO and the founder of the company and have worked for many years in the banking industry and the asset management industry in Luxembourg and in Scandinavia. And you're not alone. No, I'm not alone.
Speaker 2:With me.
Speaker 3:I have my partner Christian.
Speaker 4:Lussholm yes, Hi, my name is Christian Lussholm and I am a CCO in Quanto, so responsible for all the client relations and also our partnerships in Quanto. I'm also coming with many years in banking and in technology companies.
Speaker 2:And can you tell us a little bit more what Quanto is doing? Yes, definitely.
Speaker 4:Well, we basically have been serving clients for now seven years and we have clients in Luxembourg, switzerland and the Nordics here clients in Luxembourg, switzerland and the Nordics here and we are helping clients with their regulatory and compliance reporting. So that means it's compliance reporting within the Pripskit's key information documents they need to supply for their funds or it's the ESG reporting, like SFDR reporting, that they need to report on for their portfolios and their funds.
Speaker 2:Very exciting. What started this story? How did it all start?
Speaker 3:Well, it started actually with a very deep knowledge and work in the risk management space and there was a new legislation coming in the EU on the PRIPS products, which means these packaged and insurance-based products, and the legislation was very complex and required a lot of calculations and analytics. And that was spot on because we had a risk management system that we could utilize for these calculations. So we saw an opportunity in the markets back in 2018. The legislation should have come in 2019. The legislation should have come in 2019. It was postponed four times and then it came into law in 2023.
Speaker 2:So that was actually what sparked it and we started with a big fund administration company in Luxembourg, and would you mind telling us a little bit about the secret sauce. How does it work?
Speaker 3:Yes. So our approach is to make things that are complicated very easy for the users. That's kind of our DNA. So the secret I can say is that we have made an end-to-end system, starting with the data that has been transformed and filtered and cleaned and checked and all that, and then we do all the calculations and then we add all the texts and we have the templates for these regulatory documents that are defined by legislation and by the EU, and then we integrate all this and we normally say that we compute the contents of the reports and in addition to that, we also have a corporate design that fits our clients, so that all the documents are also nice and pretty, uh, for the consumers that receive all these reports or read them in the um, when they're sitting with their investment, uh and choosing between products, then they can see, ah, okay, this product is actually uh, this looks good, it looks like a high quality product and maybe this is something for me.
Speaker 2:I get it. What I was very surprised of, and positively surprised, is that on the website, for example, you mentioned a lot of real-time data. So where does that come in this process? Because typically a report would say it's something that's made on a moment, a given moment in time.
Speaker 3:Yes, so you can say that it's a. It's a straight through processing, which means that when that changes in in underlying data, it's it's, it's immediately passed through the documents whenever they are produced. But we also have a monitoring that goes on continuously and that checks all the documents if they are up to date. So we trace and monitor the produced documents. And what do we trace and what do we monitor? Well, we monitor the contents of the analytics.
Speaker 3:So, for instance, an example is the risk class, which is a number between one and seven, where seven is high risk, and one is low risk and if the risk class has changed, then the document where the product has changed its risk class is identified, where the product has changed its risk class is identified and there's a possibility for the company that has produced this product to decide to make a new document, an updated document. So that's an example.
Speaker 2:Yeah, so you go far and beyond just creating the document. It's really a process. It's monitored and it's trace, traceable and so on and so forth. Now, what I also like is to see 24 languages. Now there is like a tentacle on me that says there is some large language models involved. Is that right?
Speaker 3:Well, that's a context-specific model that is optimized only for doing translations, and the specialty you you can say is that it's an industry model. That is below, but we have an additional layer on top that ensures that the context language of the EU regulatory space where we are in with investment products. For each language that is translated, there are about, let's say, about 35 different terms that are then uniquely specified in each language. It's not always the same terms, but there are a few things, and that is in order to optimize the translations. And then we get about 98-99% perfect translation. And it's not just the language that we are, it's not just the text. We're actually translating the whole document, including all the structure of the document, all the tables and all the charts, so everything is translated. It's not just the text, it's actually all the headers in the tables, all the legend texts in the diagrams and so on. Everything is translated.
Speaker 2:Well, that sounds like very state-of-the-art technology, but how does that marry with the fact that a lot of the asset managers also have their own sort of language and they want to get consistency with their own way of saying things? Is that also included? Can they modify the models?
Speaker 3:Yes, so we have a layer of the most used terms that are not translated properly and then through this fine-tuning we have added that and then some clients they wish to have their own layer and that is added on top. So it's like you can think about it in three layers. So below you have the market model, on top we have the quantum layer and then the top layer is the, the specific customized client layer for translations and and how typical onboarding for a new client look like it's actually a very easy onboarding process, um, so you, we have made it flexible so you can choose.
Speaker 4:Uh, you know how much integration you want to start with. So you can either just upload your portfolio in an Excel sheet, for instance, or your price data directly from an Excel sheet, or we can automate it, so we basically include the data from your data sources on a daily upload and then the only onboarding needed is basically just one or two sessions, 30-minute sessions with the team, and then they are fully up and running and then they will do everything in the system. And the system is really made so you can say all the different departments, they have access and they can work in it. So, operations, compliance, esg team, they all can work in the system and include their specific data or text and also check documents and so on.
Speaker 2:When you explain it like this, that actually means that this is a tool for the bigger and the smaller ones. Is that correct, and can you give some examples of clients that have already stepped into the journey with you guys?
Speaker 4:yes, definitely, as we can see that especially also when we look at the wealth management area. There we have seen we have just onboarded also some smaller wealth managers that are only having, you know, very limited or a small amount of model portfolios, and that works very well, and they are maybe interested in a full service solution where they just want to have a final document that they can supply. But we also have more advanced clients or very large corporations where it's hundreds of documents that we are making, where it's all the different teams that are working together in the system. So you can say it's basically built for both and we are coming out of making a system for fund admin companies.
Speaker 4:So you can say we are also able to differentiate different legal entities and who has access to which part, and so so it can basically fit both small and large organizations and across different legal entities and across countries.
Speaker 3:Yes, and also a segment that is a little bit different than the investment fund area is, for instance, the markets area. So it can also be used in a stockbroking firm where they trade and maybe want to make a pre-trade check. There we have APIs that can be utilized and within a few milliseconds they can actually get a calculation of the risk classes and the performances and so on. So that's also a possibility where we have some potential clients in that space and another one is in the unit-linked insurance area, for instance another area and then in banking you have, of course, the wealth management areas and then you have all the fund areas.
Speaker 2:So it's quite varied. I was wondering the whole time would you call yourself a REC tech or a WEL tech?
Speaker 3:We are a technology company basically, but you can say we have a lot of knowledge that we have built into the system on the RegTech area, but otherwise we are a software, computer software firm. We're highly specialized in finance and in the EU regulatory space.
Speaker 2:Okay, then maybe it's both, if you think about it. We're almost at the end of this conversation, so I'm really wondering what's actually still on the planning. What's next? Can we expect something new?
Speaker 4:Yes, it's going extremely fast, I would say. And when we develop things, we always work very closely together with our clients. So we listen to them. What are their needs? What is it that they need to make their everyday life even easier? So now we have the PRIPS kits, now we have ESG documents like SFDR, pi, et template, and you can say now we are looking into adding all other documents that are needed by our clients. So that means fact sheets, it could be management reports, even prospectuses and so on. Why not have everything in one system? And that's kind of the goal we are working towards.
Speaker 2:Nice, nice. I'm sure there's listeners that want to hear more about where you guys are heading, so where can people contact you?
Speaker 4:Yes, but they should just visit Quantocom and then they can fill in a form and we will contact them immediately, or they should definitely pick up and call me or write an email directly to me, and that you can find on our website.
Speaker 3:Yes, and Quanto is spelled? Q-v-o-n-t-o dot com.
Speaker 2:Excellent Guys. Thank you so much for this conversation. Thank you also to the audience and stay tuned for more news out of the fintech industry. Thank you very much.
Speaker 1:Thank you for participating here, thanks, thanks for listening to another episode of the connector podcast. To connect and keep up to date with all the latest, head over to wwwjointhekonnectorcom or hit subscribe via your podcast streaming platform.