At Sibos 2004 in Atlanta, the industry admitted that it failed to make minimal STP gains in asset servicing.

The message in 2005 is not too different. Although vendors admit that muted progress has been made over the past 12 months, they are also quick to admit that a lot more needs to be done in terms of automated messages between custodians, issuers and investment managers.

In regards to year-on-year progress, several key developments have emerged in the asset servicing industry. SWIFT, sponsor of Sibos, has experienced double-digit growth in its ISO 15022 corporate action messaging platform and also inaugurated its SWIFTNet proxy voting solution. Currently, SWIFT has upped its total corporate action messages to around 40 million. It also has 1,000 senders and 3,000 recipients in over 130 countries.

In Asia, transformation has continued at the Tokyo Exchange, which has begun using eXtensible Business Reporting Language (XBRL) for proxy voting. The Japanese institution has further enhanced its asset servicing capabilities by upgrading to SWIFT's ISO 15022 message type, one of two standards the securities industry is promoting for corporate actions.

"The introduction of STP voting is one of the most important processes for custodians and customers," says Tomoyoshi Uranishi, executive officer, Tokyo Stock Exchange. "We've also been providing corporate action services through other different channels and through ISO 15022 since January of this year. We have tried to further expand our services but weÆ're at the stage where the customer is still thinking about our proposal."

This adoption failure by customers, in particular, issuers, to STP messaging is seen by many custodians as a restrictive element in the industry.

The problem remains that while custodians are advanced in terms of technology standards and automation, many clients, predominately issuers and investment managers, have resisted the urge to upgrade to a compatible STP server.

Those in the custodian world do not precisely agree on the major issues surrounding the growth failure in STP, but do point to the cost of transforming to automation and lack of education as some of the main impediments.

"The big benefit for custodians is customer service," says David Kane, senior vice president at JPMorgan Chase. "Everyone focuses on the efficiency benefits, but as a custodian it is vital to have a slick information flow with your clients. We have thousands of corporate actions being notified each day across 86 markets to our global customer base, so the ability to send that announcement information in a crisp, clear and concise format is a real service differentiator.

"But there is still a long way to go at the front and back of the chain," he continues. "Currently I don't think individual capital markets issuers see the benefits of moving on to a standardized format. There is a view that their issue is unique and hence very personal, and not something that could be or should be standardized."

However, it does appear that the majority of custodians and Sibos panel experts believe that standardization issues will remain some of the main points for the foreseeable future. Although there are many industry groups working on recommendations to standardize notifications from the issuers to allow them to send out a message that can be read by the whole industry, a workable solution is still some time off, regardless of the benefits to the issuer and investment managing industry.

"Our role is to move the industry and it is nanve to think that the benefits to the issuer would not be explained overnight," says Kane. "We're not holding our breath though."