Deutsche Bank last week formally launched an automated straight-through processing (STP) fund-administration and custody solution in Indonesia, which has received a warm welcome from asset managers in Jakarta.
Despite the prevalence of manual processes in the Indonesian fund-management industry, several firms in Indonesia are already using the solution, says the German bank. They include BNP Paribas Investment Partners, Schroder Investment Management and Manulife Asset Management, as well as ABN Amro (RBS) for its fund-distribution business.
As a result of the automated process, clients now benefit from reduced operational risks, greater efficiency and cost savings through higher levels of productivity, says Deutsche.
The service has increased Schroder's speed of administration and settlement in Indonesia, confirms Dewi Aviany, head of portfolio services at the asset manager in Jakarta. And "Deutsche is currently in communication with us, to ensure the STP solution works as expected", she adds.
This is not the first STP admin and custody solution to be offered in Indonesia, she says, but Deutsche Bank is the first provider to offer a more "friendly" STP solution regardless of the back-office system used by clients. Other firms offer similar services, but only to clients with suitable IT capabilities, such as Schroders Indonesia, adds Aviany.
Deutsche's service has a simpler process than other solutions and the login requirement is set automatically in advance, says Aviany. Hence users do not need to repeatedly log in and pick the menu selection for uploading transaction data.
The bank says its global host-to-host file-transfer solution can be installed without the need for clients to make any significant systems changes. It allows clients to connect different trading systems to the bank's fund-admin and custody platform for a seamless flow, from electronic trade instructions to settlement processing, including automated reconciliation and valuation report generation.
Aviany agrees that implementing the solution should be easy if a fund manager already has its own back-office system to process settlement instructions. "It is just a matter of setting up the connection, authorisation and file mapping between the fund managers' format against the data format required by Deutsche Bank's STP fund admin," she adds.
As for the time frame for implementation, Schroders initiated the discussion with Deutsche about the automation process in the middle of July, says Aviany. The fund manager then intensively worked on the details with the bank at the end of September and went live at the start of December.
Schroders uses five fund-admin service providers for its mutual funds in Indonesia: Deutsche Bank for eight open-ended funds with AUM of $1.92 billion; Citi for one open-ended and seven capital-protected funds with AUM of $209.63 million; Bank Central Asia for three exclusive (that is, white-label) funds with AUM of $166 million; HSBC for two public funds and one exclusive fund with AUM of $121 million; and Permata Bank for one exclusive fund with AUM of $15 million.
Deutsche Bank is the first fund admin provider that Schroders used following the launch of its first funds in 1997. In the second half of 2009, the asset manager switched from Deutsche to Citi for custody of its aggressive balance fund, Schroder Dana Prestasi, "for commercial reasons", adds Aviany.
The new service reflects Deutsche Bank's commitment to automate processes in Indonesia and Asia as a whole, says Thibaud de Maintenant, Asia-Pacific head of domestic custody services. For example, in Malaysia, the bank launched a sharia-compliant fund-admin and custody service and a registrar and transfer-agency service in March.