Rates of funds processing automation by transfer agents (TAs) in the cross-border fund centres of Luxembourg and Ireland reached new highs in 2016, according to a new report published by The European Fund and Asset Management Association (EFAMA) in cooperation with SWIFT.
The report is an on-going campaign by EFAMA and SWIFT to highlight the advancement of automation and standardisation rates of orders of cross-border funds. Twenty nine TAs from Ireland and Luxembourg participated in this survey.
The report reveals that the total volume processed by the 29 survey participants reached 34 million orders last year, while the total automation rate of processed orders of cross-border funds reached 86.7 per cent in the last quarter of 2016, an increase of 1.3 percentage points (pp) compared to the fourth quarter of 2015. The use of ISO messaging standards rose by 2.2 pp to 53.4 per cent, while the use of manual processes dropped to 13.3 per cent (-1.3 pp) in the same time period.
The total automation rate of orders processed by Luxembourg TAs reached 84.4 per cent in the last quarter of 2016 compared to 82.9 per cent in the last quarter of 2015. The ISO automation rate increased from 65 per cent in Q4 2015 to 68.3 per cent in Q4 2016, while the use of proprietary ftp decreased from 17.9 per cent in Q4 2015 to 16.1 per cent in Q4 2016.
The total automation rate of orders processed by Irish TAs increased to 90.6 per cent in the fourth quarter of 2016, from 89.7 per cent in the fourth quarter of 2015. The ISO automation rate increased by 0.9 pp to 27.8 per cent, whereas the adoption of proprietary formats remained at 62.8 per cent.
Peter De Proft (pictured), EFAMA Director General, says: “Year after year, the cross-border fund industry is getting closer to their goal of automatically process at least 90 per cent of fund orders. This means that faxes and calls are used less and less to place fund orders. This is good news because a greater level of automation raises the quality and efficiency in investor services, and reduces operational costs”.
Fabian Vandenreydt, Global Head of Securities, Innotribe and the SWIFT Institute, SWIFT, adds:
“Despite a decline in numbers of orders received by cross-border transfer agents, we have seen in increase in automation rate. The industry clearly continues to focus on driving automation and efficiency, resulting in a decline in manual orders to the benefit of ISO automation. In addition, it is encouraging to see that when it comes to setting up new links, the industry confirms that ISO standards remain the most favoured and efficient automation option”.