JPMorgan Securities Services is using the corporate actions processing services of TCS BaNCS.
While SWIFT’s SIBOS conference and exhibit is known for serving many financial services sectors at once, the securities community at the weeklong event in Toronto last week had a lot to explore, including the news from JPMorgan, which added corporate actions processing support from TCS, EquiLend embracing DLT, and Duco exploring new technologies.
JPMorgan Securities Services Embraces TCS Platform
At Sibos, Venkateshwaran Srinivasan, global head, financial solutions at Tata Consultancy Services (TCS), spoke to FTF News about “an expanded strategic alliance” between TCS and JPMorgan’s Securities Services custodian business. That alliance now encompasses new corporate actions processing services via TCS BaNCS, officials say. The corporate actions processing platform will be offered to JPMorgan’s global custody clients in more than 100 markets, officials say.
The multi-market platform “will enable J.P. Morgan Securities Services to provide clients with a standardized and streamlined process in each market whilst achieving over 90 percent straight through processing for mandatory corporate actions,” according to TCS officials.
“We selected TCS BaNCS to assist in further streamlining our corporate actions processing and providing near-real-time data to global custody clients enabling them to make time-critical investment decisions,” says Hannah Elson, global head of custody, JPMorgan, in a prepared statement.
The other main drivers for the expanded alliance include JPMorgan’s custodian business wanting more data in a centralized location and the bank’s customers wanting more timely processing of corporate actions, Srinivasan says. The investment bank’s custodian business has gone live with the BaNCS platform.
“It’s not just a deal announcement — just to be clear. They are completely on the platform for their entire global custody operations,” Srinivasan tells FTF News. “For now, it’s more of a JPMorgan-specific implementation for their global custody clients.”
The TCS corporate actions solution is “fully ISO15022, ISO20022, and DTCC20022 compliant, with automated end-to-end processing for all types of events and products, including derivatives, across all global markets. TCS BaNCS is also certified with the SWIFT Ready label for Corporate Actions,” according to TCS.
The TCS BaNCS for Corporate Actions asset servicing solution has been adopted by custodians other than JPMorgan’s group, and TCS is working to improve the communications among custodians, Srinivasan says. “We are also looking to see how we improve efficiencies between custodians … That’s a future investment for us,” he says
The TCS corporate actions platform is in use at central securities depositories (CSDs), investment banks, fund and asset managers, and brokers. In fact, eight of “the top 10 custodian firms worldwide and 300 capital market firms run on the TCS BaNCS suite of products,” TCS officials say.
TCS is an IT services, consulting, and business solutions organization that offers an integrated portfolio of business, technology, and engineering services and solutions. It is part of the Tata group, India’s largest multinational business group, officials add.
EquiLend Launches DLT Pilot for Securities Lending
EquiLend officials announced on Sept. 14 that they launched a pilot test of its EquiLend 1Source recordkeeping system for securities lending and they were on hand at SIBOS to discuss the experiment. The new system to come — based on distributed ledger technology (DLT)/blockchain technology — is scheduled to be fully launched in 2024, EquiLend says.
The system retains a central record of agreements between counterparties in a securities lending transaction. EquiLend officials say the recordkeeping function is designed to get rid of mismatched details that can be part of a securities lending transaction. Such mismatches are common and can typically only be resolved through a manual reconciliation that can be expensive.
Officials say 1Source can be integrated with existing installations of its Spire system, NGT trading platform, and Risk Resolution Suite (R2S).
Duco Touts Client List & Current Explorations
In time for SIBOS, Duco officials cited the reconciliation and data automation vendor’s embrace of software as a service (SaaS), cloud, and artificial intelligence (A.I.) as reasons for why 20 customers representing more than $50 trillion in total assets have implemented the Duco platform “to automate operations and controls on their cash account processes.”
James Maxfield, the new chief product officer for Duco, says that in garnering these customers the vendor has “displaced a well-established set of vendors, differentiating ourselves with a light technology footprint” in a prepared statement.
“However, cash reconciliation systems are often monoliths based on legacy technology which inhibits business agility,” according to the Duco announcement, which notes that its cash solution is intended to reduce the complexity, costs, and lead-time of IT customization and upgrades.
Wealth manager JBWere NZ uses Duco to “automate our daily asset and bank reconciliations to quickly and effectively identify and categorize reconciliation breaks. … We see the potential for so many data validation and comparison tasks across our business. Because of the impressive no-code functionality, reconciliations can be built and owned by the Operations team, without the need for IT support,” says John McDermott, chief operating officer (COO) at JBWere NZ, in a prepared statement.
An anonymous quote from a global head of operations at a Tier 1 global hedge fund notes that the firm “saved on the cost of having on-premise solutions, the hardware involved in managing those, IT headcount, tech support and development time.”
While at SIBOS, Maxfield told FTF News that Duco was discussing with conference participants a pilot project focused on attempting to remove challenging “touch points” in post-trade operations via predictive analysis. A new layer of analysis would help firms foresee breaks in the operations process. Maxfield refrained from providing further details but did acknowledge “It will be part of the product.”
In addition, at its SIBOS booth, Duco offered demonstrations of its collaborative efforts with Jaid, which describes itself as “an A.I.-powered platform that identifies and extracts critical data from across diverse company and customer communications.” For the demo, Jaid “scanned, read, and understood” key email messages related to operations and then created a case for acting, according to Maxfield.
SIBOS 2023, which was sponsored by the financial messaging and systems consortium SWIFT, attracted approximately 9,000 participants in the global financial services industry and featured approximately 500 expert speakers and more than 250 conference sessions.
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