Joint SWIFT/EFAMA report shows encouraging increase of fund processing standardisation
2014 mid-year status update confirms total industry ISO automation rates continue to progress.
Brussels, 27 November 2014 - The European Fund and Asset Management Association (EFAMA) today published in cooperation with SWIFT, a new report aimed at tracking industry progress on the evolution of automation and standardisation rates of fund orders received by transfer agents (TAs). The report focuses on the cross-border fund centres of Ireland and Luxembourg in the first half of 2014.
One of the main findings of the reports is the growing volume of automated processed orders, which increased by 2.5% to 12.2 million during the first half of 2014 (against 11.9 million in H2 2013). In parallel, the use of the ISO standards increased to 50% in the second quarter of 2014 (from 45.3% in Q4 2013). This evolution is mainly explained by the decrease of automation through proprietary File Transfer Protocol (FTP).
EFAMA and SWIFT have long campaigned to communicate on the advancement of automation and standardisation rates of orders of cross-border funds, and this report emphasises further this joint initiative. 32 TAs in Ireland and Luxembourg, representing more than 80% of the total incoming third-party investment funds' order volumes in both markets, took part in the survey.
The report highlights are as follows:
- The total automation rate of processed orders of cross-border funds reached 78.2% in the second quarter of 2014, compared to 78.7% in the fourth quarter of 2013. However, the use of ISO messaging standards rose by 4.7%, reflecting a fall in the use of proprietary FTP formats by 5.2% over the same period.
- The use of ISO messaging standards increase to 59.6% during Q2 2014 in Luxembourg compared to 57.7% in Q4 2013. The use of proprietary FTP decreased to 16.5% in Q2 2014, from 17.6% in Q4 2013.
- The percentage of automated orders based on the ISO messaging standards increased to 27.5% in Q2 2014 in Ireland, compared to 20.9% in Q4 2013. The use of FTP decreased to 55.7% in Q2 2014, from 64.7% in Q4 2013.
Peter De Proft, EFAMA Director General, notes: "We welcome the fact that the use of ISO messaging standards in the processing of fund orders of cross-border funds in Luxembourg and Ireland has reached the 50% threshold for the first time. This is an important contribution to the objective of strengthening efficiency in fund-back office activities for the ultimate benefit of end investors."
Fabian Vandenreydt, Head of Securities Markets & Core Business Development, SWIFT, adds: "We applaud the continuous progress towards ISO adoption. Together with EFAMA, we are continuously encouraging the industry to alleviate the high costs and inefficiencies associated with manual processing by supporting initiatives that foster automation and standardisation for the funds industry, and we should not give up there."
* Please see the accompanying attachment for the joint EFAMA/SWIFT standardisation mid 2014 report and the ‘Notes to editors' section for further information about EFAMA and SWIFT.
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About the European Fund and Asset Management Association (EFAMA)
EFAMA is the representative association for the European investment management industry. EFAMA represents through its 27 member associations and 63 corporate members about EUR 17 trillion in assets under management of which EUR 10.6 trillion managed by over 55,000 investment funds at end June 2014. Over 36,000 of these funds were UCITS (Undertakings for Collective Investments in Transferable Securities) funds. For more information about EFAMA, please visit http://www.efama.org/.
SWIFT is a member-owned cooperative that provides the communications platform, products and services to connect more than 10,500 banking organisations, securities institutions and corporate customers in 215 countries and territories. SWIFT enables its users to exchange automated, standardised financial information securely and reliably, thereby lowering costs, reducing operational risk and eliminating operational inefficiencies. SWIFT also brings the financial community together to work collaboratively to shape market practice, define standards and debate issues of mutual interest. For more information about SWIFT, please visit http://www.swift.com/.
The report can be downloaded on the websites of EFAMA and SWIFT.