Relative stability of automation rates masks a disparity between regions
SWIFT together with joint partners AFAC, HKIFA and ALFI, published today a new report on the current levels of automation and standardisation rates of fund orders received by transfer agents (TAs) in the Asia Pacific fund processing centres of Hong Kong, Taiwan and Singapore for the first half of 2018. The report is an on-going campaign by SWIFT and fund industry partners to highlight the state of play of automation and standardisation rates of orders of cross-border funds, and track progress. 24 TAs from the three markets participated in this survey.
Key findings of the report include:
- The total volume processed by the 24 survey participants reached 3.3 million orders in the first half of the year.
- The total automation rate of processed orders of funds reached 66.4% in the first half of 2018, down from 68.4% in the second half of 2017, ISO messaging standards were used in 30% of the volumes, whilst the use of proprietary FTP rate hovered at the 36.5% mark for the same period.
- In Hong Kong, the total automation rate of orders processed remained relatively stable at 61.5% in H1 2018, compared to 60% in H2 2017. The ISO automation rate recorded at 23.3% during the period, while the use of proprietary FTP recorded at 38.2%.
- In Taiwan, the total automation rate of orders processed reached 81.5% in H1 2018, compared to 81.1% in H2 2017. The ISO automation rate declined to 39.6% (from 45.7%), while the use of proprietary FTP increased to 41.9% (from 35.4%).
- In Singapore, the total automation rate of orders processed reached dropped to 34.7% in H1 2018, from 59.4% in H2 2017. The ISO automation rate also declined to 21.4% (from 28.2%), while the use of proprietary FTP increased to 65.3% (from 31.2%).
On the report, Alexandre Kech, Head of Securities & FX, SWIFT said: “ I am always shocked to hear that faxes are still used in 2018 for the distribution of funds. Providing the industry with a neutral statistical view on funds distribution automation and standardisation is important to us as it can only support the industry’s effort towards operational efficiency, risk and cost reduction.”
I am always shocked to hear that faxes are still used in 2018 for the distribution of funds. Providing the industry with a neutral statistical view on funds distribution automation and standardisation is important to us as it can only support the industry’s effort towards operational efficiency, risk and cost reduction.
AFAC said: “The slow growth of the automation of fund orders against the back drop of the digital era of 4th industrial revolution is disappointing. Those who are still processing manually need to review their business models to avoid being left behind. The PRC already has 99% plus automation rates.”
Ching Yng Choi, Head of the ALFI Asia Representative Office noted: “ALFI is highly supportive of this initiative by SWIFT which follows the path of the work carried out in Europe between SWIFT and EFAMA. This survey helps understanding the level of automation in Asia and subsequently identifying action points that associations such as ALFI can promote among its working group members.”
HKIFA added: “The report provides fund managers insights to the state of automation and standardisation of cross-border funds within key markets in the Asia-Pacific. The rate of adoption has witnessed some increases, though there is still much room for improvement. The industry will continue to strive to further enhance operational efficiency so that we can achieve better outcomes for investors.”
Please download a full copy of the the SWIFT and Joint Partners APAC Funds Processing Automation and Standardisation Report H1 2018.