20 October 2009 News

 

BGI goes live with automated managed funds processing using HSBC and Swift

Barclays Global Investors in Australia has gone live with automated funds transaction processing using Swift Funds.

It joins local fund market participants HSBC Sub-custody and Clearing, RBC Dexia Investor Services and Vanguard Investments Australia, which have recently adopted automated transaction processing to replace some of the 15,000 wholesale fund application, redemption, confirmation and reporting faxes shared daily among Australia's funds community.

According to Michael Garrett, head of regional operations at Barclays Global Investors Australia, the Swift project allows them to focus on providing a better service for their clients and reducing the errors and risks associated with manual processing.

"The Swift Funds solution is an enabler of our drive to continually explore and implement efficient, risk-reduced processing of client transactions. Automating these transactions frees up our staff to answer client queries and focus on our clients in a pro-active manner rather than be reactive. We can also leave our system running to accept and process orders, knowing that the details are accurate while we monitor for any exceptions."

Peter Snodgrass, head of securities services, HSBC Securities Services Australia, remarked: "We are pleased to add Barclays Global Investors as a counterparty with whom we can automate our managed funds transactions across Swift. We are now seeing the significant benefits of automation with further reduction in processing risks, allowing us to enhance service to our clients. We look forward to working with other parties as they join us in this initiative."

''The delivery of this two-year project takes Funds automation to the next level in Australia and certainly will drive additional momentum in other South Asia countries,"  remarks Charles Legrand, head of South Asia, Swift.

HSBC Sub-custody and Clearing, which went live in April 2009, reports an initial replacement of approximately 100 faxes per day thanks to the new system, and expects to see an increase as more funds managers adopt industry standard automated transaction processing.

Tim Hamer, Swift securities commercial manager for funds in Australia & New Zealand, said: "Orders received via SWIFT require little or no manual intervention and initial acceptance processing can be completed in seconds.  Manually processed orders such as those that come in via fax, on the other hand, require an average of four minutes of checking and can tie up people for several hours if there is a problem."

According to Tim Worner of Morse Consulting, the costs of this simple processing can be as much as A$40 for a simple transaction and more for complex transactions.

Hamer explains that in addition to reducing cost, the purpose of automating funds transactions is to improve distribution practices, reduce associated risks and gain greater efficiency.

"It makes sense for funds managers to implement basic funds processing using industry standards so that transactions can be completed securely and at the lowest cost. Automation can also take out much of the work involved in dealing with problem orders, especially at the front end of processing.  It is not uncommon for paper-based transactions to be held up for basic reference reasons.  And when they cannot be corrected for value on the day of receipt you end up with customer service issues." 

"By adopting globally recognised standards, the implementation work required for adding more business counterparts is considerably reduced and the technology can be reused across other regions and geographies," he concluded.