29 November 2018

Automation and standardisation are set to drive the future of fund processing

In their latest report, SWIFT and the European Fund and Asset Management Association (EFAMA) highlight a growth in automation rates for cross-border fund orders that rose to 89.4% during the first half of 2018

EFAMA, in cooperation with SWIFT, published a new report about the evolution of automation and standardisation rates of fund orders received by transfer agents (TAs) in the cross-border fund distribution centres of Luxembourg and Ireland during the first half of 2018.

Read on to learn more about their key findings.

ISSA and SWIFT issue major reports on securities markets

Progressing towards greater automation

The mid-year report, which surveyed 28TAs from Ireland and Luxembourg combines the data from both countries into a single cross-border fund processing report. It provides statistical evidence on the advancement of automation and standardisation rates of cross-border fund orders in which ISO 20022 has a part to play.

According to Janice E. Chapman, Manager, Investment Funds, Standards at SWIFT, “More and more parts of the funds business are adopting an automated approach with ISO 20022 message standards and with the advent of an enhanced ISO 20222 funds reference report message in 2019, this will, indeed, complement this continued growth.”

The report also provides data on standardisation levels of fund orders in Italy.

Regulation will drive standardisation

For Peter De Proft, EFAMA Director General, “The success of both UCITS and AIFs reflects the investors’ interest in these products and the ability of fund managers to improve their competitiveness, notably by eliminating manual processes, which are costly and subject to operational risks.” In addition, De Proft indicates that the regulatory landscape will influence the adoption of standardised processes.

Looking forward, the European Commission’s ambition to tackle remaining barriers to the cross-border distribution of funds will contribute to further support investor demand and will make fund processing standardisation even more important.

Peter De Proft, Director General, EFAMA

Key highlights of the report
  • The total order volume of cross-border funds increased by 5.4% to 20.3 million orders in the first half of 2018, up from 19.3 million orders in the second half of 2017.
  • The manual processing rate of orders of cross-border funds fell to 10.6% in Q2 2018 from 12% in Q4 2017. Whilst the use of ISO messaging standards decreased slightly from 55.5% in Q4 2017 to 54.7% in Q2 2018, the use of proprietary file transfer protocols (ftp) increased to 34.7% in Q2 2018 from 32.5% in Q4 2017.
  • The share of manually processed orders by Luxembourg TAs declined from 14.6% in Q4 2017 to 13% in Q2 2018. The ISO automation rate remains stable at 69.6% in Q2 2018, while the use of proprietary ftp increased to 17.4% compared to 15.6% in Q4 2017.
  • The total automation rate of orders processed by Irish TAs reached 93% in Q2 2018, compared to 92.1% in Q4 2017. The use of proprietary ftp went up to 60.9% in Q2 2018 compared to 59.6% in Q4 2017, whereas the ISO adoption rate slightly decreased to 32.1% in Q2 2018, from 32.5% in Q4 2017.
  • Read the report to learn more about the findings of the survey.
Key highlights of the report
  • The total order volume of cross-border funds increased by 5.4% to 20.3 million orders in the first half of 2018, up from 19.3 million orders in the second half of 2017.
  • The manual processing rate of orders of cross-border funds fell to 10.6% in Q2 2018 from 12% in Q4 2017. Whilst the use of ISO messaging standards decreased slightly from 55.5% in Q4 2017 to 54.7% in Q2 2018, the use of proprietary file transfer protocols (ftp) increased to 34.7% in Q2 2018 from 32.5% in Q4 2017.
  • The share of manually processed orders by Luxembourg TAs declined from 14.6% in Q4 2017 to 13% in Q2 2018. The ISO automation rate remains stable at 69.6% in Q2 2018, while the use of proprietary ftp increased to 17.4% compared to 15.6% in Q4 2017.
  • The total automation rate of orders processed by Irish TAs reached 93% in Q2 2018, compared to 92.1% in Q4 2017. The use of proprietary ftp went up to 60.9% in Q2 2018 compared to 59.6% in Q4 2017, whereas the ISO adoption rate slightly decreased to 32.1% in Q2 2018, from 32.5% in Q4 2017.
  • Read the report to learn more about the findings of the survey.

Fund Processing Standardisation

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Last update: 
29 November 2018

Tracking industry progress - 2018 Mid-Year Data Report

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Securities

Fund Processing Standardisation

Tracking industry progress - 2018 Mid-Year Data Report

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APAC Funds processing automation and standardisation - Tracking industry progress

Relative stability of automation rates masks a disparity between regions
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Investors and regulators expect increased levels of transparency, compliance and customer service

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