Asia leads SWIFTNet Funds migration
Delegates to Sibos learnt today that Asian fund houses and regional fund house operations dominate a list of firms rolling out the latest fund processing automation technology.
SWIFT announced at Sibos that fund industry players can now use SWIFTNet Funds for live operations related to order processing, price reporting and cashflow reporting. This is the first stage of SWIFT's large-scale initiative to support funds processing automation, enabling enhanced profitability, scalability and service levels. The launch follows successful testing of all solution components by the group of SWIFTNet Funds pilots.
Asian fund players who have signed up to use SWIFTNet Funds include JF Asset Management, Fidelity Investments in the Asia Pacific region, INVESCO Asia, Cathay United Bank, Dexia Trust Services, Far Eastern International Bank, HSBC Securities Services in London, Hong Kong and Singapore, Schroder Investment Management in Luxemburg and Asia, Taishin International Bank, and Merrill Lynch Investment Managers and Citibank globally.
According to Ian Buckley, regional director of the securities industry division of SWIFT in Asia, the significant take up by the industry in the region is recognition of the high cost and high risks associated with manual processing today.
"The managed funds industry in Asia is set to double in terms of assets under management over the next five years according to recent studies. The banks will play an ever increasing role in distributing product. The only way the business can grow at this pace is to embrace automation," he said. "We are pleased so many of our customers have stepped up to the plate in Asia."
Charles Welham, commercial director of SWIFTNet Migration at SWIFT, said that while Asia often lags in terms of developments, in this case the region is ahead of the game. "In Asia, because they don't have the legacy, they can see the benefits of cost reduction for using SWIFT. There are demands for greater transparency, longer selling windows, more frequent reporting and better service to clients. Using SWIFTNet Funds allows that to happen so our users are better placed to serve their end users."
As further proof of the hastening of automation in the Asian fund industry, the Government of Singapore Investment Corporation (GIC) announced that it has selected SWIFTNet FIX to trade electronically with five of its brokers. Further expansion of connectivity and trading access to more counterparties is envisaged in a second phase.
"We look forward to taking full advantage of the benefits related to SWIFT's FIX hub, especially the security and reliability features," said Johnny Heng, head of equities trading, GIC. "SWIFT's plans for automated certification will also substantially reduce GIC's burden of testing with each new trading partner."
According to Heng, a number of key factors played a role in GIC's decision to use SWIFTNet FIX. The SWIFTNet single window offering supports messaging across the whole securities trade lifecycle. It also allows linkages with front office connectivity to bring about potential economies of scale in technical implementation and operation. Furthermore, the hub and spoke nature of SWIFTNet FIX provides straightforward FIX session management and supports post trade messaging for allocations and confirmation in FIX, he explained.
"SWIFT is honoured that such a well-known and respected institution as the Government of Singapore Investment Corporation is giving us the opportunity to enhance its business with SWIFTNet FIX," said Francis Remacle, head of securities at SWIFT. "GIC has been a SWIFT client for over 14 years and this is an excellent opportunity for SWIFT to further prove the SWIFTNet FIX business model in Asia."
From the trading of securities by funds such as GIC to the distribution of funds to investors, the take up of automation in the Asian fund market is accelerating.