The current debate over whether traditional bankers or artificial intelligence (AI) will dominate investment management is heating up. Both sides present compelling arguments, with significant implications for the future of finance. This article explores the strengths and weaknesses of each approach, drawing on insights from financial experts and academic research.

The Case for Bankers

Pros:

1. Human Judgment and Experience: Bankers bring years of experience and intuition to the table, which can be crucial in navigating complex financial landscapes. Their ability to interpret qualitative data and make informed decisions based on a wide range of factors is a significant advantage.
2. Relationship Building: Personal relationships with clients allow bankers to understand their unique needs and tailor investment strategies accordingly. This personalized approach can lead to higher client satisfaction and trust.
3. Ethical Considerations: Human oversight can help mitigate ethical concerns and biases that might arise from purely algorithmic decision-making. Bankers can apply moral judgment and consider the broader impact of their investment choices.

Cons:

1. Limited Data Processing: Human analysts cannot match the speed and volume of data processing that AI systems can achieve. This limitation can result in slower decision-making and missed opportunities in fast-moving markets.
2. Bias and Subjectivity: Human decision-making is susceptible to biases and emotional influences, which can impact investment outcomes. Personal biases and subjective judgments can lead to inconsistent and suboptimal investment strategies.
3. Higher Costs: Traditional investment management often involves higher fees due to the need for human labor and expertise. These costs can be a barrier for smaller investors and reduce overall returns.

The Case for AI

Pros:

1. Data-Driven Decisions: AI can analyze vast amounts of data quickly and accurately, identifying patterns and trends that humans might miss. This capability allows for more informed and objective investment decisions.
2. Efficiency and Speed: AI systems can execute trades and adjust portfolios in real-time, responding to market changes faster than human managers. This speed and efficiency can lead to better performance and reduced transaction costs.
3. Cost-Effective: Automated systems can reduce operational costs, making investment management more accessible to a broader audience. Lower fees and increased accessibility can democratize investment opportunities.

Cons:

1. Lack of Human Insight: AI lacks the nuanced understanding and empathy that human advisors provide, which can be crucial in certain investment scenarios. The absence of personal interaction can make it difficult to address specific client concerns and preferences.
2. Ethical and Bias Issues: AI systems can perpetuate existing biases in data and decision-making processes, leading to ethical concerns. Without proper oversight, these biases can result in unfair or discriminatory outcomes.
3. Dependence on Quality Data: The effectiveness of AI is heavily dependent on the quality and accuracy of the data it processes. Poor data quality can lead to incorrect predictions and suboptimal investment decisions.

The outcome of the debate at the end of 2024: a draw.

The future of investment management may not be a zero-sum game between bankers and AI. Instead, a hybrid approach that leverages the strengths of both could emerge as the most effective strategy. Human advisors can provide the personal touch and ethical oversight, while AI can enhance efficiency and data-driven decision-making.

How do clients feel about AI versus human advisors?

Client opinions on AI versus human advisors are mixed. Many clients appreciate the efficiency and lower costs associated with AI-driven investment platforms, especially those who are tech-savvy and prefer managing their investments online. However, a significant number of clients still value the personalized advice and emotional support that human advisors offer, particularly during market volatility and major life events. Studies show that while AI can provide valuable insights, it often lacks the nuanced understanding of individual financial goals and risk tolerance that human advisors bring. Ultimately, the preference for AI or human advisors often depends on the client’s specific needs, financial knowledge, and comfort with technology.

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The event will take place on the 27th of November 2019 at the Sheraton Brussels Airport (Brussels National Airport, 1930 Brussels, Belgium).

The full program will follow soon here.

Innovative insights on the future of fintech

The financial landscape is undergoing rapid transformation. Uncertainties about the search for adequate tech talent and how to deal with regulations, open banking, payments, cloud computing, ecosystems/hubs, crypto-assets, insurtech, trust and sustainability keep finance experts busy.

During the Digital Finance Summit on November 27, market players, both large and small, old and new, will share their fresh views on these latest innovations, while regulators and decision makers will enlighten the ecosystem players on how to keep the fintech sector stable, secure and reliable for all.

Innovating together

Previous events in Brussels have included the Fintech Belgium Summit and Digital Finance Europe, all organized separately. This year, the two events merge together into one flagship event: Digital Finance Summit. The DFS is the result of a collaboration between four partners: the European Banking Federation, representing the European banking sector, Febelfin, representing the Belgian financial sector, FinTech Belgium, representing the fintech community in Belgium, and B-Hive, the collaborative innovation platform for financial institutions and fintechs.

Given the different backgrounds of these organizing partners and their networks, DFS is a fintech breeding ground, a unique event offering a complete view on current technological, regulatory and financial insights.

In the heart of Europe and European policy

The DFS is the biggest fintech conference in Belgium, in the heart of Europe. Hosted in Brussels, the capital of European policy setters, this event is one of the few places enabling large financials, start-ups and technology experts to merge their respective potential while picking up on European fintech growth, valuable partnerships and regulatory insights.

About B-Hive

B-Hive is a European collaborative innovation fintech platform that brings together major banks, insurers and market infrastructure players. Together, they work on common innovation programs and build bridges between B-Hive’s corporate partners and its start-up and scale-up community members. B-Hive aims to put Brussels on the map as the smart gateway to Europe and leverage on the opportunities offered by the digital transformation for the financial services industry. B-Hive believes that building bridges between important fintech hubs and the Eurozone enables both European and non-European companies to grow and expand.

The Executive Chairman, Fabian Vandenreydt, states: “Change is happening fast, fueled by continuous tech solutions. However, innovation is not only about technology. The ultimate impact of these emerging tech solutions will be felt by the end-users: consumers, households, businesses and employees in the financial sector. That is why it is important to bring the entire European fintech world together. Hosted in the capital of European policy setters, the Digital Finance Summit is the perfect platform for global innovators to share insights and to be inspired by a unique blend of industry leaders. The objective is to turbo boost the European fintech ecosystem.”

About EBF

The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe, including all EU and EFTA countries. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.

The Chief Policy Officer at EBF, Sebastien de Brouwer, says: “Bringing together so many financial innovators provides a unique opportunity for the global fintech community to visit Brussels. We see that regulation is changing fast and the ecosystem keeps on growing, especially the access to artificial intelligence solutions and the growing data economy. We are looking forward to pushing the European fintech potential to new heights with policy experts and entrepreneurs.”

About Febelfin

Febelfin represents the Belgian financial sector. In collaboration with the banks, Febelfin is developing a social, safe and more digital banking system. Innovations range from sustainable investments and diversity in banking staff to instant mobile payments, from pension savings and a strong integrity policy in banks to new career opportunities for employees of the financial sector in other sectors and from social loans and a basic banking service for refugees to continuing financial training for individuals and entrepreneurs.

The CEO, Karel Van Eetvelt: “Open banking, collapsing business models, Libra,… the financial services industry is facing unseen challenges. Tackling those will require an all-hands effort by the financial institutions, fintechs and regulators alike. Brussels as EU capital is halfway between London and Frankfurt and less than 2 hours from any European financial regulator. This conference is also intended to be a strong signal to the new EU Commission and financial regulators: Let us work together to create a business environment that guarantees that European citizens and SMEs can continue to rely on a strong and competitive European financial sector for access to financial services.”

About FinTech Belgium

FinTech Belgium asbl/vzw is a non-profit organization created in 2015 by and for fintech companies in Belgium. It is the first and largest community of fintechers in Belgium, uniting financial professionals, startup entrepreneurs and investors, who are interested in discovering and discussing disruptive business models and new technology for the financial services industry.

Its Chairman, Jean Louis Van Houwe, asserts: “Changes in the financial, insurance and regulatory fields are accelerating with the emergence of new challenges, new opportunities and new players. It is important that at least once a year all stakeholders can meet to keep up-to-date, hear the latest trends and establish collaborations in this fast-growing environment. After 3 successful editions of the FinTech Belgium Summit, we are very happy to now be combining forces with other organizations to organize 2019’s major FinTech event in the capital of Europe: the Digital Finance Summit.”

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UBS Bank was also found guilty of engaging in similar anti-competitive practices, although it was not fined due to the fact that it was the bank originally responsible for disclosing the existence of such collusion to the Commission back in 2013.

“The Commission’s investigation has revealed that these banks exchanged sensitive information relating to the foreign exchange market, and often coordinated their operations and business strategies,” said the press release. “Such exchange of information, which was largely a result of a tacit agreement between the participating banks, allowed them to make informed market decisions about whether to sell or buy various currencies at different times.”

In determining the size of the fine, the Commission took into account the overall value of the sales and purchases made by the banks in question, as well as the degree of seriousness and duration of each particular offence.

The press release also emphasised that “any person or company harmed by anti-competitive practices such as those described in this case may appeal to the courts of the relevant Member State to claim damages.”

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Digital payments will, however, still be perfectly possible on those days via bank card or smartphone.

Febelfin advises everyone to plan their money transfers ahead of time in order to avoid unpleasant surprises or delays.

“If you make a digital transfer (“virement par voie numérique”), your beneficiary’s bank will normally receive this transfer one business day after your own bank has processed it. Due to the extended weekend, however, such a payment may well be postponed. From Friday, April 19 until Monday, April 22 no such payments will be processed,” said Febelfin.

In the case of instant money transfers (“virements instantanés”), however, payments will still be processed instantaneously. (Such money transfers are, in fact, invariably done immediately, 24 hours a day and 7 days a week, regardless of whether it is a weekend or a public holiday).

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“The zinne is an alternative to, not a substitute for, the euro,” said Sophie Hublot during today’s press conference. The idea is to support the local community by orienting consumption towards local and independent businesses that take environmental and social responsibility, thereby avoiding value being lost to the speculation economy.

The day before the launch, close to 90 Brussels businesses had agreed to accept the new currency as payment.

The café-restaurant L’Eau Chaude in the Marolles neighbourhood is one of them. “We joined because our values are similar,” says Jeanne, who prefers to not have her surname published. “We are planning to use the zinne to pay some of our local suppliers, like the bakery in Saint Gilles where we get our bread, and the herbalist that prepares our teas. Hopefully, in the future, we will also be able to pay our vegetable supplier using the zinne.”

L’Eau chaude also functions as one of 23 exchange bureaus where people can switch their euros for zinne, one zinne equals one euro.

The bills, designed by Liv Quackels and featuring scenes from Brussels municipalities, are printed on watermarked paper with holograms to avoid copying. They will be printed in values up to 20 zinne, including a 0 and a 2.5 zinne bill. The zero bill is connected to the concept of time banks, which can be used for the exchange of services between individuals.

You can also purchase professional services with the zinne. Quentin Blondeau is an architect working with environmental concepts such as energy savings and sustainable materials. “I support the values of the zinne and 90% of my projects are in the Brussels region so it made sense for me to join. As an architect I don’t buy a lot of things, but I might use the zinne to repair things, like a broken computer.”

The zinne is a citizen-run project, but has received backing from the local authorities. Financité, the NGO behind the initiative, received support from the Brussels region to launch a VUB study to measure to what extent a local currency can increase the resilience of the city in the case of a collapse of the euro. Financité has also payed for the design and the print of the bills.

Local currencies are already in use in several other communities in Europe, including 15 in Belgium. “We are in contact with the other communities,” says Sophie Hublot. “To hear the experience from long-running initiatives, such as the Val’Heureux in the Liège region, has been very helpful in the development of the zinne.”

The businesses and the exchange bureaus included in the zinne network can be found here.

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The event, which took place at BnP Paribas’s headquarters, brought together numerous expats who felt they were in similar situations. They are often on business trips abroad or they have to work in two or more countries.  Several of them had also been temporarily posted from one country to another. The seminar was of special interest also to corporate representatives (HR, financial) who have responsibility over those employees who have to travel often. What does this imply?

These situations have obvious implications regarding these expat’s tax status, social security and labor law issues, as well as formalities that need to be observed in order to avoid criminal liability. Participants heard how to find the best solution for their situations by Sophie Maes, international employment lawyer at Claeys & Engels, and Marc Verbeek, tax consultant at Crowe.

Major points of discussion were social security regulations which pertain to Europe, tax considerations, European Health Insurance card, and the Limosa declaration. Mrs. Maes stated: « Nowadays, it has become very easy for employees to work internationally. However, that does not necessarily mean that no formalities must be observed. For example in case of business travel to Belgium, a Limosa declaration must be made for meetings exceeding 20 consecutive days per meeting or 60 days in total per calendar year. Heavy criminal penalties may be imposed to both the foreign employer and the Belgian end-user in case of non-compliance. »

Considering that Belgian social security is the second highest in Europe — second only to France’s —  it is only understandable that expats try to find legal ways around it.

The overflow of commuters in Belgium made commuter agreements another major point in the discussions. Mrs. Maes discussed employment law considerations to consider in case you are working under a company in a foreign country, but you have a contract with a company back home. Sophie Maes added: « Expats often have commuter arrangements according to which they e.g. work 2 days from home abroad and 3 days in Belgium. However, organisations should be aware that such arrangements may also have an impact on applicable social security and employment laws. For example, in case employees work in 2 or more countries, they are subject to social security in their residence state if they work at least 25 % in their residence state. »

In addition to getting tips on international tax, social security and labor law issues, participants got to network with peers and exchange ideas over a glass of wine during the light reception.

The event was sponsored by BnP Paribas Fortis, Claeys & Engels, and Crowe.

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Be Angels is one of the two networks in Belgium which provides business support and smart early stage financing to start-ups. In order to familiarize Brussels Express’s readers with the concept of a business angel as well as the work of Business Angels Belgium, I have conducted an exclusive interview with Claire Munck, the CEO and administrator of Be Angels.

Could you please tell our BE readers about Be Angels? What is the impact of your association and business angeling on women in Belgium?

Be Angels is one of the two networks in Belgium which provides business support and smart early stage financing to start-ups. In order to familiarize Brussels Express’s readers with the concept of a business angel as well as the work of Business Angels Belgium, I have conducted an exclusive interview with Claire Munck, the CEO and administrator of Be Angels.

Over the years, we have supported close to 300 companies in several investment rounds and our members have invested about 45 million Euros in those companies with a leverage effect of 2 to 4; which means that for every Euro invested by a business angel, the company will be able to attract 2 to 4 Euros of co-financing from banks or co-investment funds and the like. This has been the impact, and about 70% of the companies we have invested are still alive and functioning. Today, about 20% of our member base (which is 300 members strong) are women investors.

In 2012, we created the Women Business Angel Club to help women become business angels and this enabled us to evolve from having very few women business angels to about 20% of our members being women through different mechanisms. What we had to change in order to increase the number of women investors in our groups is as follows:

• We had to change the time of the meetings, as they were too early in the afternoon and did not enable women who have a full time job and are also generally in charge of the family to come back home and get organized to head back out.
• We have diversified the source of deal-flow for our members, so the source of projects in order to have some new sectors in the pool of projects such as social entrepreneurship projects or impact investment projects.
• We have also diversified out selection committee, so we started integrating women in the selection committee.
• We also introduced training programs which were directed towards attracting women investors who prefer to go through courses and learn how to become a BA and then practice after that, rather than learning by doing.
• And finally, we also created investor groups which enabled investors including women to invest smaller amounts in a collective pot of money to invest in a group so as to try and see whether they liked being business angels with a more reasonable amount invested.

What proved to be the most effective tool in increasing the participation of women in angel investing?

The key is communication. Communicating about the angel group is just as important about communicating about role models, profiles of women angels to whom other investors can relate to.

Training is the second most important element, followed by investment solutions that are more tailored towards women investors.

Could you introduce us to the WA4E project? What is your role in it? According to you, what does the project foster in terms of female investment?

The WA4E is a consortium of several countries – such as UK, Italy, Spain, France, Portugal and Belgium- working on the same challenge which is: How do we increase the number of women investors in our angel groups and how do we make that sustainable?

We face the same difficulty and challenge, which is that we all find that there is not a sufficient number of women investors around. The idea was to share the situation of women angel investing in every country and share among ourselves some of the solutions that we have found in our eco-system to help women invest and then work on common tools that we have found appropriate; whether it is to bring women entrepreneurs to apply to business angel groups, so as to raise capital, but to also help women join angel groups and professionalize their approach to investment.

Who is a business angel?

A business angel is someone who has a career as a manager or a career as an entrepreneur. They have to have a background and most importantly an interest in the entrepreneurial sector. Someone who will be able to dedicate about 5-10% of their wealth to invest in capital in start-ups, this means that there is high-risks involvement and this is money that they can afford to lose. They need to have some time available to help entrepreneurs, even though the time can vary, it is important that as a business angel you join an angel group because you have the willingness to invest but also to provide support through committing your time and your network of contacts.

If you fit the profile we have just discussed and if you are passionate about entrepreneurship Be Angels organizes several events in Brussels for those who are interested. You are invited to get involved through their website: http://www.beangels.eu/contact/

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If you have followed European news over the last few weeks, you may  have heard about Italy and its fiscal issues. The Italian government has faced criticism with regards to its fiscal targets, as it aims to implement a set of measures that could induce some issues with regard to public finances. While the European Commission was presenting its autumn opinions on the national draft budget plans 2019, a big focus was on Italy.

But those opinions are definitely not only about Italy, and each Member State of the Euro area has received an evaluation from the Commission. Belgium was therefore no exception in this regard and although there is no major risk today, the Commission has shared a few concerns for next fiscal year.

Under the EU fiscal rules, which are part of the Stability and Growth Pact, Belgium should reduce its structural deficit of 0.6% of GDP per year (the structural deficit refers to the deficit without any impact of growth). For that purpose, the nominal growth rate of government expenditure should not exceed 1.6% of GDP this year.

The Commission however has found a “risk of significant deviation”, with an expenditure benchmark gap of 0.8% of GDP in 2018. This gap also should reach about 0.9% of GDP next year.

This is why the institution found a “risk of non-compliance” within the EU fiscal rules. It then invites the Belgian Federal government to implement some measures or reforms in order to comply with those rules. Although it seems there is no risk of sanctions today, the main point is about avoiding any sort of sanctions in the future.

Many parties across the EU often criticise the way EU fiscal rules have been designed. But the point is about trying to comply with the EU legal framework.

Four additional countries also face a risk of non-compliance with the EU fiscal rules in 2019: France, Portugal, Slovenia and Spain.

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Are you or your employees:

• Frequently on foreign business trips?
• Working simultaneously in two or more countries?
• Being temporary posted from one country to another?

Employees are becoming increasingly more mobile internationally.

Then you will most likely be facing tax, social security and labour law issues. Also formalities need to be observed which may lead to criminal liability in case of non-compliance.

During this seminar we will explain the possible pitfalls and opportunities.

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Settling down in a new country often takes a lot of effort and resources. One spends quite some time understanding the new culture, mastering the language and trying to fit in, while also trying to understand how to take care of more immediate and practical issues, such as key legal and financial questions. These latter tasks in particular may require time and research to be completed and may often seem difficult to execute. Information and data are scattered among different experts, offices and fields of expertise, and it may require a lot of time to gather all the details needed. It may also be difficult to have a stimulating and complete one-to-one conversation.

Head of Expatriates at BNP Paribas Fortis, Salvatore Orlando, noted that, “The Expat Financial Affairs has a multifaceted approach with an important added value: at the same time, it offers several practical workshops with the best of the expertise and networking opportunities. It gives a unique and direct connection with specialists, stakeholders and partners who can engage in a one-to-one conversation and satisfy all the curiosities, doubts or questions of the participants”.

On its fifth edition, the Expats Financial Affairs has developed over the last years becoming a “must” event and it gathered several media partners, which were present during the evening with a stand. The event has spread also outside of Brussels, for instance in Ghent and Antwerp. The Expats Financial Affairs pays great attention to the participants’ questions: each participant is unique, each situation different. To gather experts in the same place, on the same day is the added value of this event. The workshop on expat real estate planning in Belgium ended with concrete questions for instance about the impact of the EU succession regulation.

The event is not just a good occasion for collecting some useful information on taxes, investments and pensions, but also an opportunity to meet other expats, enhancing one’s network. It is a welcoming, inclusive and open platform through which expats can help each other, understanding the Belgian society they live in and finding their own space in it.

About the event

The Expats Financial Affairs held its first edition in 2014: the organizers (the British Chamber of Commerce, BNP Paribas Fortis and the Fry Group) perceived at that time the importance of offering a complete and exhaustive set of financial information to expats just arrived or already living in Belgium. The presenters are among the best experts who can offer the most precise, direct and practical solutions to those who are planning their life in Belgium or who already settled down.

The easy access to expertise is unique and innovative: different experts are gathered in one place and at the same time, which makes research and interaction easier and faster. It also offers practical solutions in a concrete and articulated context, offering a 360 degrees approach to each topic.

If you want to know more

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