The European Fund and Asset Management Association (EFAMA) has published, in cooperation with SWIFT, a new report 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 the first half of 2011.
The new report is part of an on-going campaign by EFAMA and SWIFT to highlight the advancement of automation and standardisation rates of orders of cross-border funds. In Ireland and Luxembourg, 31 TAs representing more than 80% of the total incoming third-party investment funds order volumes in both markets, participated in the survey.
According to the report, the ISO messaging standard continues to strengthen with 37.3% in Q2 2011 compared to 35.4% in 2010, to the detriment mainly of proprietary file transfers. Luxembourg is paving the way with over 50% ISO standardisation and Ireland has witnessed its strongest growth yet +3%.
The total automation rate across the two fund centres reached 75.1%, compared to 74.8% during 2010.
Regional rates, based on contributions representing 67% and 75% of the order volumes in Luxembourg and Ireland respectively, show that:
The automation rate of orders originating from the Asia-Pacific (APAC) region continued to be relatively low in Q2 2011 compared to other regions: 44.4% in Luxembourg and 48.3% in Ireland against 2010 where they stood at 44.6% in Luxembourg and 39.6% in Ireland.
The combined regional ISO standardisation rates continue to be much higher with EMEA-based order givers; the rate shows 34% for Q2 2011, compared to 32.1% in 2010.
The total number of orders processed by the 31 TAs in the first half of 2011 was 13.2 million. This represents an average 2.2 million monthly volume of orders, up by 16% compared to the first half of 2010.
Peter De Proft (pictured), EFAMA Director General, says: “Our latest survey confirms that the automation rate of cross-border fund orders remained above 75% during the first half of this year. The goal for 2012 should be to move closer to the 80% threshold, and concurrently with a rising ISO standardisation rate. Strengthening efficiency in fund back-office activities remains one of the best ways of controlling operational risks and enhancing the competitiveness of our industry.”
Marco Attilio, Head of Funds at SWIFT, says: “We are pleased with the progress of ISO adoption across Luxembourg and Ireland transfer agents. It is clear there is a demand for standardisation in the market, which we are happy to support. This is particularly true with recent volatile market conditions that put a strain on funds operations and bring more risks and costs to the industry. Industry players can leverage automation and ISO standards to shield themselves from operational consequences and focus on their core value proposition.”
