Christian Kromann

This transcript was generated automatically (YouTube auto-captions) and then edited for readability: names and obvious mis-hearings corrected, filler words removed, speaker labels added where the speaker is clear. Passages that could not be understood are marked [unclear]; short omitted passages are marked [...]. Timestamps are approximate. The recording is the authoritative version.

Julius Ambrosius 00:00:00

Welcome to the first episode of Campus To Capital. I'm Julius

Konstantin Girst

and I'm Konstantin.

Host

Nice to meet you guys and thank you for tuning in. And for the very first episode we are joined by a very special guest. Christian Kromann, former CEO of SimCorp and executive board member of Deutsche Börse Group, is joining us for an interesting talk. Hello Christian.

Christian Kromann

Hello guys, and thanks for inviting me.

Host

Thank you for coming. Yeah, thank you for your time. And I mean, those are some pretty impressive positions, and I mean, it's a very great chance to be talking to somebody that is on such a great professional level. But could you maybe walk us through your career, from studying economics at KU to your leadership roles in fintech now?

Christian Kromann

Sure I can. So how much time do you have? So yeah, let's start way back. It's many years ago now. So as you rightly said, I studied economics in Copenhagen University, in, what was that, starting in the late 80s and going into the early 90s. And as you quite often do in Denmark, especially in Copenhagen, you get a relevant work in the later part of your study, and I ended up in a bank. And then in the early 90s, mid 90s, banking was very different than it is today, and that's where I derived, really started

00:01:30

to take off, and risk management became a real profession, much more sophisticated than it was. And all of these things, even at that point you couldn't do without technology, and at that point technology also really started to take off. You would see a lot of the software companies [unclear] in the financial industry was actually founded in those days, because that's really where the use cases started. So I started in what is now not there, it was called something else, way back, called UniBank, and worked for 5 years in their risk management department, utilizing it, and probably the first time I really got the flavor of kind of math, sophisticated financial engineering and technology had something to do with each other. And then eventually that led to a job in a large global software company now called FIS. It was called SunGard in the days and was sold to FIS in 2016. So what they were doing were creating solutions for sophisticated risk management. So actually at that point I then joined as a consultant implementing systems, so configuring yield curves, valuation functions and all of these things, for quite many years. Traveled around the world and met many financial institutions and implemented the systems to their needs. So also there, there was math, it was finance, it was technology, but now I also got an international angle to the experience.

00:03:00

And then eventually inside SunGard I got interested in sales, so I actually spent part of my years in SunGard selling, which, you're basically selling transformation, and I really enjoyed the psychological aspects of selling big transformations. And also there, that was a European job, so really got to know a lot of financial institutions, understood how decision makers think when they make a big transformation, and also really got the flavor of being an integrated part of that. And then eventually that also led to leadership positions. First obviously leader of a team and then eventually leaders of leaders, and long story short, that took me to my first kind of real executive position. So I ended up running a business inside SunGard. And then actually at that point SunGard was owned by quite a few private equity companies, so there was a big restructuring going on as part of that as well, so I also got the hang of that. And I was so lucky to very early on in my career get involved in very large kind of companies restructuring

00:04:31

projects, putting companies together, reshaping the value proposition and go to market again. But all of that actually ended up with 17 years in that organization, which, you know, if I was young and somebody would tell me today you have to spend 17 years in the same organization, now what are you talking about. But because it was big, you ended up learning a lot of things, doing many different things during those 17 years. But then I felt ready to take on my first CEO job, and one thing is I feel ready, then you need to find somebody that actually thinks you're ready. But I ended up running a technology company that was doing the processing for claims and insurance pricing, which is extremely sophisticated stuff. A small Danish tech company owned by private equity, EQT. So that was my first real CEO job. I ran much bigger divisions, but I felt it was interesting to actually be at the end of the table running a company that was a little bit smaller, so I could both do that but also kind of understand how the company worked in every corner. Was there three years, created a great turnaround and growth, and then eventually SimCorp called and asked whether I was interested to

00:06:01

join in a COO job in the first round, and then eventually I ended up succeeding Klaus Holse as CEO. Took a little longer than expected, it was the middle of Covid, but eventually we got there. So that was very exciting. And then obviously fast forward into where we are now. SimCorp got sold to Deutsche Börse in the end of 23, and then, yeah, a couple of weeks ago stepped up to my executive management board position in Deutsche Börse Group. So I would say it's more or less been technology firms all the time, except for those five years in the bank where it was really getting the knowledge of those sophisticated parts of a financial institution. So very much a red thread, that it has always been sold to large sophisticated financial institutions. So yeah, it's been exciting so far.

Host

For sure. Yeah, I mean it sounds very exciting. And as you just briefly touched upon, you just transitioned to Deutsche Börse from SimCorp, and we're wondering what challenges or also opportunities did you encounter when you transitioned from SimCorp to the group?

Christian Kromann

So me personally, or SimCorp?

Host

No, no, you personally.

Christian Kromann

Yeah, but I think that

00:07:31

was a bit of a longer process, if you imagine, right? So SimCorp became part of Deutsche Börse Group, yeah, probably around September, October 23. All that, there we spent a lot of time working together. SimCorp and Deutsche Börse had a partnership around distributing some of their products, so we knew each other quite well, even though selling a company is a big thing. And then eventually there was a succession process ongoing in Deutsche Börse, where Theodor retired and Stephan Leithner stepped up as the new CEO, and I was so fortunate, in the end they asked me whether I wanted to follow Stephan Leithner and take the lead on the IMS side. So quite a few things are different, right? So it's German corporate culture, which is, probably you've seen a bit of Denmark already, so the culture is different. It's a much bigger company. Even though SimCorp is also a reasonably big company, Deutsche Börse Group is substantially bigger. It's a regulated company, which is also very different. Not regulated as a bank, but it's still regulated. So quite a very different day-to-day feel, from running a software company where things are moving at a very high pace

00:09:01

to running a very large German corporation that is regulated and to some extent has a very close tie to big parts of the political landscape in Germany as well. So for me, I would say, probably a big personal change, but running the IMS segment as such is very close to what I did with SimCorp already, so from that point of view I feel at home. But I'm obviously learning kind of corporate world again, even though Deutsche Börse is roughly the same size as what SunGard was when I was there. I kind of understand how a big company works, but certainly a few things are different. But the ambitions are high, and in the end that's what drives me, and it's a fun team I work with.

Host

I mean, that sounds nice. It's great. I'm happy that you like the German corporate culture, from what I heard.

Christian Kromann

I didn't say that. I just said that it was different.

Host

Oh no.

Christian Kromann

It's, we have a lot of fun discussion there. There's a great relationship between Danish and German culture. There's certainly differences, but I think in the end what comes for me is the values. The values are the same. But as I said, we had a town hall in Germany and somebody asked me what's the biggest difference between German and Danish culture, and I said, well, meetings in Germany take a very long time.

Host

Yeah, that's, I think it's a stereotype that holds true,

00:10:31

that we thoroughly think through a lot of things and are very detailed. That's for sure. Bureaucracy and all of those things. I mean, looking back at your early career though, I mean, you broke into the financial industry quite early and then obviously you had a very successful progression within it. But are there maybe any career decisions that you regret doing, or something that you would do differently now if you could change it?

Christian Kromann

Yeah, but it's always a lot easier to look in hindsight what you would have done differently, right? You know, I have two sons. One is 23 and is already studying as well, and one is 16, is approaching a more serious part of his kind of studying career. And of course they asked me, well, you know, do you have any advice? It's very seldom they ask that, so you have to take your opportunity when they do. And I think, if I, probably would have liked to start by learning a few more sectors than just one, if I could. I love the sector, right, don't get me wrong, but I could probably have started out by being a bit more general and understand many types of businesses. I think that is what I really liked. But you know, somehow I think I would have ended up the same place, but being a bit more generalist. And on some of these things, not to go into too much detail, the study I started my career with is extremely

00:12:02

academic and very little about business. So I probably also in hindsight would have loved to learn a little bit more about business. Now I learned it, you can say, the hard way or the real way or whatever you want to call it. But learning a bit more business in general, more generalistic across many sectors in the beginning, I probably, if I could start all over, that would have been great.

Host

Okay, yeah. I mean, a question that's pretty much connected to this is: what is your most valuable piece of advice for students or young professionals aspiring to excel at the intersection of technology and finance?

Christian Kromann

Yeah, but if you want to go into that sector, of course, then you know, probably not too bad to replicate a bit what I've done, right? I would say, I really, and I can see that now, the fact that I did work on the customer side at some point helps me a lot, because in the end, you know, we're all commercial companies. If nobody wants to buy what we build, then it's irrelevant, right? So having that ability to put yourself in the customer's shoes, I find extremely important, right? So I would say learn some craftsmanship, some real knowledge early on in your career. I think is a good advice that I don't think will ever haunt you. And I think maybe more on the, everybody always asks me, you know, do you have a career plan, did you plan

00:13:32

anything? You probably heard many times that people like me say, well no, we didn't have a career plan. It was in the end more ambition and aspiration, and then actually you have to be lucky as well. You have to have somebody that wants to give you a chance, right? Somebody needs to believe in you at some point, otherwise you're never going to get the next shot. So that's also probably an advice: you know, find some people that can actually give you some feedback and help you on the journey is also very important, both in personal life but also in professional life.

Host

And I mean, something that I hear a lot is that it's important to specialize in a certain direction, but you also said that the general business knowledge is very important in today's world. How can you balance this specialization and this broad skill set?

Christian Kromann

Yeah, it's, you know, it's a fundamentally good question. It's something we discuss quite a lot when we hire people in the various roles I've been in. And what do you do, right? Because in the end, if you hire people, you actually ultimately want to keep them for a longer time and develop them and make them the future leaders. So in principle, as a company you want people to be productive as fast as possible, right, which drives specialization in principle.

00:15:03

But I still mean what I say: if I could choose, well, for my kids, but anybody that asks me, you know, get yourself a bit rounded in the beginning and be cool about it. But luckily there's plenty of companies out there that have figured that out, right? So consulting companies or whatever they are, that's what they offer, right? So go with that a bit, and then find the business you find interesting and go deep at a certain point in time.

Host

I think I really like that point, because [...]

Christian Kromann

Yeah, 100%.

Host

And I mean, as you said, obviously, but getting that experience, you need to have people that buy into you. You need to have people that like you, I guess, know about your skills. And I mean, obviously some people have it easier than others, but for a lot of people networking per se, or connecting with a lot of people, reaching out to a lot of people, asking for chances and opportunities, is not as easy. So do you maybe have some tips that we could give away for someone that wants to improve their ability of building lasting professional connections?

Christian Kromann

Well, I can personally say that I get a lot of

00:16:33

people connecting with me in many different ways. The only thing I ever take time for is things like this, because first and foremost, on a very selfish note, if I can attract anybody that would want to work in a company where I also work, that's great. But in principle I also feel I have an, you know, obligation to give something back, right? So whatever I can do in that context, my door is also always open. [...] But I think most people I meet have the same. So I think probably the mental block is more on your side, right? Do you actually want to send me an email and ask for a coffee? I think most people would say yeah, sure, right? And of course you can use the network through whoever, right? But I think maybe a question back to you guys: you know, is there enough companies actually creating network events, that you see?

Host

I mean, I would definitely say so. [...] But I also think, I mean, through the fact that we're just an information society nowadays, I think it's fairly easy to build a connection through

00:18:04

LinkedIn or maybe even social media or something. And yes, I mean, it's also easier to reach out to people, but it's also easier to obtain information about the things that you're interested in, about the company, and I think that definitely can also help you in the process of reaching out to somebody.

Christian Kromann

It's also easier to reject people that reach out, right?

Host

That's true.

Christian Kromann

So, but no, but it's good feedback, right? We do it in many countries where we are fundamentally growing the number of employees. So I think, but otherwise I would say don't be shy, and probably also quality stands above quantity in this context. I mean, building long-lasting relationships with few people is probably much more valuable than having these, you know, not very deep relations with many people. So yeah, but I thought a little bit about, I think it's a very good question. If I look at the people I've known the most, it's typically something where you've been through something difficult together, either inside a company or between two companies, you've done something. And the things that don't really last are the ones where, you know, it's just constant coffee meetings and blah blah type of conversations, nothing really happens, right? So I think, you know, once you have those kind of relationships, they typically last, and we all know people move around,

00:19:34

and then you have some basic trust. You know you can trust that person, and then next time you need something similar, that's where you start, right? That's, fortunately still people that do business with people and [unclear] machines. So I think those kind of relationships are important, right?

Host

But yeah, I think chemistry also matters. Yeah, I mean, I think once a bond is created, then I guess it will also very likely just last, because yeah, why not.

[...]

But I think now we would like to move on to talk a bit more about SimCorp and Deutsche Börse Group.

Christian Kromann

Sure.

Host

And I mean, with Deutsche Börse Group's focus on ESG data, indices, research, how do you see these

00:21:04

tools shaping the Investment Management Solutions within the next decade per se?

Christian Kromann

A decade maybe is a little long, but I think, as you rightly say, so Investment Management Solutions was a segment that was created when Deutsche Börse Group acquired SimCorp. So prior to that, Deutsche Börse Group already had set the scene for what we call a buy-side strategy, so a strategy where we support the investment management community of the world, starting with an acquisition of risk company Axioma in 2019, ISS, which is a proxy voting, corporate solution company, in 21, 22, etc. etc. So we boxed all of that into Investment Management Solutions. So it has a software leg, which is SimCorp, so it's a platform for the buy-side industry, and it has a data leg, which is ISS STOXX, which is the ESG, indices and etc. So to answer your question then. So as most likely all of you read the news, right, you almost need to read the news 24/7 right now, because there's something going on literally all the time.

Host

True.

Christian Kromann

And ESG has certainly taken a different connotation in the US at the moment. But I think it's clear that no matter what, the people need to see the ESG profile, whether it's ESG including DEI or whatever it is,

00:22:34

doesn't really matter. People need access to companies' profiles on these things, and I've seen no signs that Europe want to change any of that, right? So it's a very important point. We still see very large pension funds and other ones being active and investing in the right setup, right? The funny reality is that it's very very country specific, even within the EU, what the philosophy is. Do you kind of prioritize returns, or do you actually prioritize returns with a certain sustainable investment strategy? But let's see, the world is certainly changing very fast. But getting the right data that allows you to classify your investments is a very central part of our strategy, both on the data side but also feeding that into the platform, allowing you to do all the right optimizations on your portfolio.

Host

But would you say that the investor sentiment might change over time now, because, I mean, the US might influence you?

Christian Kromann

No, we are a global company, right? And Deutsche Börse, even though the name is very German, is a very global company. The data company that's within IMS is headquartered in the US. So yes, we are following the US situation every day. We have had to basically, what we do

00:24:04

in one of the companies is that we are basically creating the data, and then we take the policies of the investors to try to help them on how they create their voting policies etc. And those policies have already changed over the last couple of weeks, because some companies are not having requirements for gender equality in the board of directors etc. So that has gone really fast. But let's face it, there's many countries in Europe where still part of it is a legal requirement, right? So you don't change it overnight. So probably the only thing I can conclude is that the volatility is high and things are changing overnight, which normally is a good thing for technology companies, because that's the only way you can navigate in these. So I think it has changed already, and will it change again? Most likely. Exactly what the overall trend will be outside the US, I think the verdict is still out.

Host

Okay. So we briefly talked about the SimCorp, the acquisition of SimCorp. So what was it like working on such a landmark deal while having one of the key roles, I mean, on the selling side, so to say, as [unclear]?

Christian Kromann

Yeah, so it's a good question, right? So one of the first statements I normally make is: if you are CEO

00:25:34

of a public company, your job is not to sell the company. The job is to sell the company to all the investors every day, right? So if you are CEO of a private equity company, that is normally part of your job, to eventually sell the company. So that's one data point. The other data point is, when somebody buys a public company, that is a very complicated process. If a public company buys another public company, it's an extremely complicated process, and it's very well governed etc. And in this particular case it was a public company buying a public company, and you really have to ensure that you follow the rules extremely strictly. But since we were the seller and not the buyer, we were kind of on the receiving end of things, and we followed the rules and worked on it. But it's, you know, it's very different if you buy a non-public company, because then you obviously have a different access than you have in a public company, where you need to treat all investors the same. As I said, I worked in a private equity environment before, very different environment, and I bought a lot of companies as well, and once you buy private companies, you're in deep, doing due diligences and all of these things, and we don't do that in this context the same way. So it wasn't as extreme

00:27:04

from that point of view, but of course emotionally it was somewhat extreme, right?

Host

I can imagine.

Yeah. Oh, probably can't.

Host

But I mean, living in 2025, emerging technologies like AI are omnipresent for everyone. So we were wondering, how is Deutsche Börse Group integrating artificial intelligence into its Investment Management Solutions, and also what challenges does this present when integrating such a cutting-edge technology?

Christian Kromann

Yeah, I think a very good question, right, and something that I certainly spend a lot of time talking about and discussing, both with clients, prospects, but also colleagues and employees. And there's so many answers and so many questions. And the reality, if I'm brutally honest, is that we haven't gotten very far, right? I think the sector hasn't gotten very far overall. And one of the reasons is that we are dealing with a sector that is extremely protected. They're all SIFIs, they're all significant financial institutions. Data secrecy is a norm etc. So you don't really share a lot, right? So the sector is not really [unclear] for AI success from the get-go, right? That doesn't count for large language models or ChatGPT

00:28:34

or whatever they're called, but for true full-blown AI it's hard, because you can only train on your own data in principle, whereas if you compare to the medical industry etc., you actually have found a way of pooling data, so you can test on really large data sets. Here it's very different. So that's kind of one thing. But of course we're working hard on it anyway, right? So the way we do it is that, first and foremost, we obviously use copilots in as many software packages as we possibly can. Of course Microsoft goes without saying, but also some of our core applications. All our developers are using copilots as part of the GitHub development setup, etc. etc. That's the easy one. That's flicking a switch and then it's available. The younger people are much better at doing that. The older people, I would say, even I struggle implementing it in my day-to-day work, because I don't feel it, it's not natural, right? Yes, I can ask it to write a party song, but actually optimizing what I do by integrating ChatGPT or large language models, even I struggle with. But we make the tools available and we encourage people to play around with it. Then, if you look, so we are technology, we produce software. Of course we also need to invest so our clients get access to AI capabilities inside our

00:30:05

software. And once again, the copilots are built into all user experience. So instead of having old menus and stuff, you have a chat-based user experience. So that's also being rolled out in as many applications as fast as we possibly can, allowing simply the client to have a better user experience. Then, kind of, that's the easy part. Then you get to the hard part, and the hard part comes in two boxes. So basically what SimCorp does is it handles the entire front-to-back flow, so from the trade initiation, your order initiation, if you buy an equity on behalf of a client or you do an investment, all the way through to accounting. So you can imagine there's tons of data processing, data going through. A simple thing: can you predict if a trade will fail on its settlement or whether it will not? The answer is of course yes, you can, if you train the model to see when it fails and when it doesn't fail. So getting those models, the technical models, is easy, but then we're back to how do you train the model. And if you only train it on your own small data set, then, you know, the benefit might be limited. But once again, that's a big thing. That's where there's potentially even an industry effect that you can change. And then finally, of course, we do the same thing on our internal workflows.

00:31:35

Can we, if we get a lead, can we predict from all the leads which ones are potentially successful, which ones are not successful etc. So that's something we're experimenting with. The other one: we have 800 clients just in SimCorp and a very large client list on the data side. So of course people sometimes have problems, so we have help desks and we have tickets coming in. Can we use it? Can we create a dispatch function that basically sends the ticket to the best person to fix it, so you optimize the time? So there's, you know, a crazy amount of use cases you can get in. The real question is how do you fundamentally change the culture in a company to think AI first. And here is where you guys come in, right? Because hopefully your generation will actually think AI first when you get into the job market. And then us providing the tools as a company would then start to move the agenda. So there we have a lot of hopes right now. We're obviously making things available, we're training people, we're encouraging people and all these things. But that's not enough. You also need to kind of flip the brain and the mentality a little bit. So lots going on. Many

00:33:05

use cases. It's not one thing that suddenly gives you 30% efficiency. It's many things at the same time, and just an ongoing process.

Host

Absolutely.

Christian Kromann

And you can also see, it's interesting if you look at all the reports that are coming out, it's actually, the variation of what people expect that AI will eventually mean is extremely large, right? So there's people below 10%, there's people at 30%, and you know, 30% efficiency is a lot for a company. So let's see. I'm sure we underestimate the full effect, but probably [unclear] will come slower than everybody else.

Host

I mean, what I think is good is that a lot of students will break into the job market and they're already using AI as a normal tool, so it's already part of their working culture, because I guess most people use it for studying, to create, just work with it. So they will already be proficient. So I guess that will also show a shift within that progress. I mean, you said that it is in continuous progress, and I guess it will take time, a lot more time, maybe a couple of years, to see the full effect within the finance world.

Christian Kromann

But I would definitely, what do you guys do? How has it changed your life the last five years?

Host

[...]

00:34:36

[...]

Christian Kromann

[...]

Host

Exactly. Yeah, yeah. [...] And I think also here it's very interesting to kind of learn how to best engage with the AI, like that topic of prompting, to see what do I need to give as an input to get the best output possible. And going back to what I was saying earlier, I think there's definitely potential that AI will revolutionize the finance industry, if it isn't so already. I mean, last year I met someone who has a startup that basically applies AI to automate the basic tasks that an analyst would do at a private bank. And I mean, this doesn't have to be necessarily industry related, but are there any innovations in AI, machine learning or data analytics that are really exciting for you?

Christian Kromann

Yeah, really the wrong person to ask about that. The one thing that, you know, personally, any free time I have, I kind of enjoy any types of music, and I play drums myself, just to get my brain away from business from time to time. But there's a lot going on in terms of

00:36:06

writing music through AI, right, that I find crazy fascinating, right? Because in principle you can feed your AI with all the songs that were ever written in the world, give it a theme, and you know, ultimately something will come out, right? That's just crazy. You know, I'm so old that I kind of hope that the touch of the human makes a difference, but in reality, you know, most of the pop music that we all listen to is not very sophisticated, right? And you can also see what happened to all the streaming stuff, that they create movies, but not necessarily creating the movie based on AI, but they're creating the script through AI to satisfy as many people as possible, right? And I think, I don't know about you guys, but I find most Netflix movies incredibly boring, because they are, you know, so simple, follow a very similar

Host

Exactly.

Christian Kromann

So it's fascinating what can be done, but how do you then kind of drag it down to something that creates a real interest? But I think, if you follow, to make your point that it is groundbreaking, right? So if you then take the point where you're writing a song and you have just downloaded Spotify into your model, what about music rights? What are you

00:37:36

then going to do, right? And we all know all the Ed Sheeran cases, or whoever it was, that got accused for copying a song, right? What are you going to do? Do you have to change the model? So anyway, it's just an example that things will turn upside down.

Host

But I think, I mean, I definitely agree, and especially that it mostly is very intransparent which data exactly is being used makes it much more difficult to, for example, follow crimes or

Christian Kromann

Yeah, yeah.

Host

Just, I agree. Anything. So SimCorp is a software as a service platform, and how do you see the SaaS model evolving in investment management, particularly in the post-pandemic world?

Christian Kromann

Yeah, I'd say, for us, as you know, funny that you say post-pandemic, because the pre- and post-pandemic was night and day for SimCorp specifically, right? But I assume for the sector. Before that, because what we do is really only very large, very sophisticated financial institutions in our customer base, right? So you know, you can mention all of them, right? And before that, still to this day, they were all, they're very secretive, not secretive, but they're very protective about what they do

00:39:07

and very concerned about being impacted by anything. But pre-pandemic the US firms were already saying, well, we can't do all the [unclear] we want to do, because we simply don't have technology employees enough, right? So we need to have the system coming through the wall, and then we concentrate on actually operating the system and configuring the system. Europe was still, you know, especially in the Germanic part of the world, absolutely not, if you ever come with that. We want the data in our basement where we can see it and feel it. But post, the pandemic really changed that, right? Because just business resilience, and now since that also cyber risk, everybody suddenly, the tone from the top was that all our critical infrastructure needs to be delivered in a software as a service world. So it became, it's a license to play, right? Which in practical terms means that you don't need IT staff to operate SimCorp. So that's the underlying trend, and that obviously fundamentally changes the world for a SimCorp, because, you know, we partnered up with some hyperscalers, but because of the sensitivity of what we do, we have to deliver this ourselves, right? So that's how it has changed. It creates a lot more scalability. It means that our customers can focus on what they're good at: investing money and dealing with their clients.

00:40:37

And I think basically that trend will most likely continue. So some of the more basic functions that financial institutions are doing, they don't really want to do that anymore, right? So if they can extend from software as a service to maybe business process as a service, where they say, all right, that particular thing over there. One example is, we have all our clients, they obviously have a lot of market data coming in, stock prices, you know, bond prices, corporate actions, whatever, and they all have to secure that they have the right quality before they input it into the core system. Otherwise, as you know, bad data in, you get bad data out. Everybody is sending and cleaning the same bloody data, pardon my French, the same way, right? So is that an efficient way for the sector to do that? Absolutely not, right? So SimCorp, for example, now offers to clean that data as a service, and we do more or less the same job across multiple clients, which is good for us, we can create it in a scalable way. Good for the client, they can reallocate that staff to do something that is more top-line generating, or even save the cost if that. So the model of allowing technology providers to take a larger and larger part of the boring work, if you will, that trend I don't think will stop anytime soon, and AI might even change that.

Host

Although the reliance on this technology is kind of

00:42:07

a risk for certain.

Christian Kromann

Absolutely. And that's also why, you know, Deutsche Börse as a whole, but certainly also SimCorp and ISS STOXX and IMS, you know, the regulatory bar raises all the time. In this particular case, actually, a SimCorp that was non-regulated becoming part of a regulated organization has really given us a lot of uplift in those skills. So yeah, but that game unfortunately is a never-ending game as well, as the regulators are pushing for more and more security, right?

Host

Would you say that it's stifling innovation a lot?

Christian Kromann

Well, I think yes, eventually it does. Where's the right balance? I think, not to necessarily compare it, right, but there's obviously a lot of discussion going on after the Draghi report on whether the EU has actually put too much complexity into the system. Whether that applies specifically to what we do, it's a different conversation, but yes, there is, there's certainly some areas where I think we've gone too far, right? And I think, you know, honestly, to take full advantage of AI, I think somehow the sector needs to come together and say, for some type of data, let's try and share it, right, for the benefit of everybody. So let's see. I think the word is still out on that one. I think some of the stuff going on in terms

00:43:38

of the policy and compliance around AI is certainly also going to slow that down, if it's not well thought through.

Host

Most definitely. I mean, yeah, thank you very much for the insights, how the business processes of SimCorp are reacting to those current technological advancements. And maybe also even reflecting on that, what would you say, how people that are at the start of their career, are currently in university, should best prepare for the current transformations within the financial industry, also maybe future changes? As you said, I don't even know what happens tomorrow night.

Christian Kromann

But now it's, I think probably, and I think that the pace of change, even in my relatively short life, has just accelerated like crazy, right? Things we, you know, just 10 years ago couldn't imagine. So that curve is just going off, right? So, you know, the simple thing would say kind of fasten your seat belt and hold onto your hat, but I think probably in reality it's to go back and [unclear] skills, right? It's going to be all about skills, in my opinion, because you don't know what to prepare for, except that it's going to be complicated and sophisticated, and the more skills you have, the more you're going to be able to adapt in that. So yeah, study like crazy, party a little bit, but study like crazy is probably a good idea.

Host

Yeah, okay. Play hard, work harder,

00:45:08

I guess. [...] But yeah, I mean, living in a city like Copenhagen.

Christian Kromann

Yeah, yeah. Well, it has to do both, otherwise it's going to be boring.

Host

Yeah, that's very true. So you just told us that you're drumming, and I listened to your podcast with Oliver Wyman.

Christian Kromann

Oh yeah.

Host

And there you said that having this work-life balance is often a challenge in such a high-demand role. Do you find certain parallels between creative pursuits like drumming and this analytical rigor of finance?

Christian Kromann

Yeah, that one I actually thought about. Not really, but I do find a lot of links between playing music, and especially in a band, and leadership. Because getting people to work together in a band is exactly the same that is required to get a team of people to work together. The only difference is that, at least personally, I believe the drummer is the CEO, but everybody that played in a band believes that the lead singer thinks he's the CEO, the lead guitarist is, no, anyway. But I would say, you know, I just really enjoy playing music, because it's very hard to think about work while you do it. I don't think I would raise it to any other higher

00:46:38

level, to say that I learned other things from that, but it's really fun. So if you don't play already, you should do it.

Host

I mean, I used to play the piano, but I kind of lost my focus during the final years of high school.

Christian Kromann

But drummers are always the people that can't play anything else, right? Then you can always play the drums.

Host

Yeah. I mean, so I guess one big takeaway here is that you should find something to balance, and obviously have a focus on work-life balance despite being ambitious or being willing to work very hard. And I think maybe another takeaway that I would like to get for our listeners before we come to an end here is, so, because you talked about that people should just acquire as many skills as possible and work hard, to have a good foundation that they can bring themselves into the industry and present to potential hires. And would you maybe have a couple of skills that you think are very necessary and important right now, both soft and hard skills?

Christian Kromann

Yeah, let's say for me personally, my brain was always wired for math, right? So I've always found it extremely easy to understand math and go through that. So of course that has attracted me. I remember that, you know, what is obviously comparable to having German as a subject, having Danish as a subject, that was not particularly appealing to me, because there

00:48:08

were letters and not numbers. So I really enjoyed any problem that I could solve through a kind of [unclear] brain approach. Of course that's what I pursued. I would say later in my life, especially through also working with my wife, who is both from CBS and has organizational psychology as a subject, that understanding that human side of leadership, I can really recommend that you spend time on that early on. Both understanding how you function yourself, but especially also the appetite for understanding how other people function, is a skill that I probably, I wouldn't say I learned it too late, because it's never too late, but I only started to really appreciate it later in my life. In the early days of my career it was kind of hardcore math, finance, ambition all the time. But once you end up, you know, there's around 7,000, a little bit more, people in my domain today. If you don't understand those things, I don't think you can be a good, you can't be a good leader only by performing harder than anybody else. So whether that's a soft skill or hard skill, I leave you to judge, but it's certainly something of the toolbox, if you want to be a leader, by the way,

00:49:39

is an important thing to understand, both about yourself but also about your surroundings.

Host

Yeah, I think this is a very logical advice and a beautiful closing thought to our talk today. Christian, thank you so much for joining us and having this interesting talk.

Christian Kromann

Thank you very much. Great questions, and wish you all luck.

Host

Yeah, and to all the listeners out there, make sure to subscribe and leave a comment if you have an interesting thought to this.

Yeah, and make sure to tune in for our next episode. In two weeks we will release an interview with Magnus Resch, who is one of the global leading art market experts and also a professor at the Yale School of Management. Thank you so much.

Christian Kromann

Thank you.