The total automation rate of processed orders of cross-border funds reached 85.4 per cent in the last quarter of 2015, which represents an increase of 2.8 percentage points (p.p.) compared to the fourth quarter of 2014.
That’s according to a new report from The European Fund and Asset Management Association (EFAMA) and SWIFT on the evolution of automation and standardisation rates of fund orders received by transfer agents (TAs) in the cross-border fund centres of Luxembourg and Ireland in 2015.
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. A total of 29 TAs from Ireland and Luxembourg participated in this survey.
The use of ISO messaging standards rose by 1.8 p.p. to 51.2 per cent, while the use of manual processes dropped to 14.6 per cent (-2.8 p.p.) in the same time period.
The total automation rate of orders processed by Luxembourg TAs reached 82.9 per cent in the last quarter of 2015 compared to 81.3 per cent in the last quarter of 2014. The ISO automation rate increased from 57.9 per cent in Q4 2014 to 65 per cent in Q4 2015, while the use of proprietary ftp decreased from 23.4 per cent in Q4 2014 to 17.9 per cent in Q4 2015.
The total automation rate of orders processed by Irish TAs increased to 89.7 per cent in the fourth quarter of 2015, from 85.6 per cent in the fourth quarter of 2014. The use of manual processes falls down to 10.3 per cent in Q4 2015 compared to 14.4 per cent in Q4 2014.
Peter De Proft (pictured), EFAMA Director General, says: “The continuous progress towards ISO adoption and the impressive 15 per cent drop in manual processing of funds orders confirm that the European investment funds industry continued to improve the efficiency of its back-office operations in 2015. This is tangible proof of the industry’s commitment to reduce operational risks and to ensure ever-improving services for its clients.”
Fabian Vandenreydt, Global Head of Securities, Innotribe and the SWIFT Institute, SWIFT, says: “Back in 2009, when we launched the first EFAMA-SWIFT report, we, together as an industry, had established an objective to reach 80 per cent of automated cross-border fund orders, which seemed realistic, yet ambitious.
Today, with more than 85 per cent of cross-border funds orders automated, the ongoing progress of the transfer agent communities of Luxembourg and Ireland is a testament to the commitment of these markets to become more efficient for the benefit of its clients, and to alleviate the high costs and risks associated with manual processing.
Along with the substantial increase of funds order volumes (which progressed by 11 per cent compared to 2014), it is also encouraging to note that, when TAs are setting up new links with new order givers, ISO adoption is, more than ever, the first choice.
With EFAMA’s recommendation of a single ISO standard to be used in the funds industry, we are clearly moving in the right direction, and now is the opportunity to focus on the potential next buckets of automation, namely for transfers and account openings, where we see the biggest potential for standardisation.”