We had the privilege to participate in the Fintech Entrepreneurship Program delivered by the Luxembourg Digital Finance Academy from 27 November to 5 December, nine days in which we coached an amazing team that worked tirelessly on a Regtech case study.
Our RegTech team, composed of Stephanie Rastellini, Jean Marc Lahaye, Vesa Renfors, Georg Oehme, Ervin Zaljević and Sean Omar Klein won the finals with ESG Radar, a solution developed to help the asset managers that are currently facing challenges on sustainable investing.
Led by our CEO, Bert Boerman, and our team, Andreas Fuchs and Xinyuan Dong, together with Tom Pfeiffer as our Expert Advisor for Sustainable Finance, the team received a use case with a concrete problem to explore. In only nine days, they developed a realistic strategy in light of sustainability goals.
But, what is the main goal of ESG Radar? – we ask our team members
“The main goal of the ESG Radar project is to help Asset Managers create a better world and to master ESG compliance with support of our innovative cloud-based software solution. Data collection and connection are made via customized processes and automated workflows while ensuring transparency and powerful reports”, explains Sean Omar Klein.
“Our main goal was to develop a solution which was fitting the requirements of an existing regulation or standard but in such a flexible way that it can be easily adapted to other existing or future regulations or sectors,” adds Jean Marc Lahaye.
"The main goal of the ESG Radar business case was to incorporate ESG factors into the investments. Even if the main driver was and is the regulation that will impose to disclose ESG factors in the investment by the end of March 2021”, states Stephanie Rastellini.
What are the benefits of ESG Radar for asset managers and what problem does it solve?
“Leveraging on the existing and market proofed Governance.com infrastructure, the ESG Radar is a cutting-edge platform which allows flexible and tailor-made solutions to clients. The product is designed to allow integration of various ESG matrixes independent of the asset classes. Depending on the individual client requirements, the asset classes, the investor base, or the reporting and monitoring requirements, different objects and workflows are created in the tool. To enjoy the full benefits of digital transformation, the processes are vertically integrated, from the source of data to the recording of outcomes”, explains Sean Omar Klein.
“It is relevant now because the strong interest generated by the investors combined with the introduction of the EU Sustainable Finance Delegated Regulation (SFDR) in 2021 will create an enormous market and obligation for SFDR compliant assets. We support the Asset Managers to overcome this transition and to place them in the pole position of the industry”, he continues.
“We have worked on Environmental, Social and Governance. This was very relevant as the standards and/or regulations have recently significantly increased the requirements and the underlying processes have become very complex. This creates the need for a system to oversee the processes, gather data, connect and merge them into a reporting solution. Thanks to this, users, asset managers, in this case, can really focus on solving problems rather than spending most of the time identifying them. Thanks to a solution like this, adapting to new regulations becomes efficient and cost-controlled,” explains Lahaye.
“Through the different reading, I noticed that many asset managers would like to incorporate ESG criteria in their investments but they do not know where to start, then it became obvious to me that before including the ESG factors to the investments, we should help the asset managers to incorporate ESG criteria to their organization and to deploy across their investments and their business relationship. We came out with the idea of an ESG matrix that could be spread and shared with internal and external stakeholders and adaptative,” explains Rastellini.
What was your experience during the ideation of the project and the support of the Governance.com team?
“We appreciate the support from Governance.com team, who has taken a lot of their time to accompany us from scratch. The essential remarks and tips from experienced players in the industry gave us the confidence to follow the right direction. I thank a lot the whole Governance.com and RegTech team for this intense experience”, explains Sean Omar Klein.
“The Governance team was always available and present, despite that our working group was working at indecent hours to help and guide us. It was good to have with us experienced persons in development and project management, as the time we had to finalize the project was not very long”, explains Jean Marc Lahaye.
“We came out with the idea of an ESG matrix that could be spread and shared with internal and external stakeholders and adaptative. However, our choice to create the ESG matrix was largely inspired by Governance.com platform. Indeed, Governance.com offers a 360-degree view, reporting tool, forms creation, and the possibility to connect several parties and address a common or a specific goal or needs. Why not adding an ESG matrix in the toolkit then? So we did”, adds Stephanie Rastellini.
FinTech Entrepreneurship Program
The Fintech Entrepreneurship Program is the first initiative of Luxembourg’s Digital Finance Academy, built by the Luxembourg House of Financial Technology (The LHoFT) and the Centre for Finance, Technology and Entrepreneurship (CFTE).
In the first edition, we participated together with three Luxembourg Fintech companies LuxHub, Tokeny, and Lingua Custodia, whose AI team also won the competition.
The team pitched in front of the notable jury, composed of Julie Becker, Deputy CEO of Luxembourg Stock Exchange; Denise Voss, Chairwoman of LuxFLAG; Ananda Kautz, Head of Innovation, Digital Banking and Payments at ABBL; Tram Anh Nguyen, Co-Founder of CFTE; and Nasir Zubairi, CEO of the LHoFT.