In a bid to boost operational risk management and efficiency, BMO will be replacing manual systems with an IT platform.
In a sweeping overhaul, BMO Financial Group (BMO) will be moving from a manual “tick and bob” system for its net asset value (NAV) production, validation and distribution processes to an automated platform intended to mitigate the risk caused by manual errors and improve investment fund administration and client service.Automation will bring efficiency and control to the NAV production process and will eliminate the use of spreadsheets and semi-manual processes in NAV validation, say BMO officials. An IT platform will also allow BMO’s fund accountants to focus on activities more valuable to the firm.
The overhaul will encompass the automation of its capture, calculation, allocation, accrual and settlement of income distributions for individual funds and across inter-funded investment structures, officials say. In addition, the firm is looking to better integrate key data, process flows and market-standard validations.
To get there, BMO officials have selected the pControl platform from the Milestone Group to manage its NAV efforts, say BMO officials.
Milestone is a specialist, fund processing provider serving asset managers, fund product manufacturers, fund distributors, life and pension companies, and fund service providers. Headquartered in Sydney, Australia, Milestone has offices in Boston, London and Hong Kong. Its client list includes BNP Paribas, Citi, JPMorgan, National Australia Bank, Schroeders Investment, U.S. Bancorp and Zurich Financial Services.
Approximately 65 BMO staff members will be using the pControl system.
“The oversight of the NAV process is currently a manual process that relies on multiple levels of supervisory review,” says Steven Hokansson, vice president, investment funds group for BMO. “The current process is a paper-oriented environment that involves a manual validation to multiple price sources, and the review of hundreds of manually generated reports that go through a manual tick and bob process to mitigate the risk of error.”
BMO is “in the process of deploying the solution” from Milestone, Hokansson says.
“We are still in the planning phase where we are determining the system architecture, which will be an important driver of when we will go live. It is estimated that the implementation will take four to six months,” he adds.
The firm also considered several other providers but Hokansson declines to name them.
“What distinguished Milestone from some of the other providers was their business philosophy which was best aligned to our vision,” Hokansson says. “Milestone Group’s pControl platform provides us with the architecture to innovate and, in effect, reinvent how fund administration is performed in Canada.”
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