FTF Panel Says Providers Must Foster New Technology as B.I.S.S. Research Joins Forces with STP Consulting Solutions
Service providers that notify clients of corporate actions have to be change agents if they want customers to replace fax machines and manual processes with XML-based standards, web-based applications, SWIFT services and mobile devices, according to a panel discussion at the Sixth Annual Corporate Actions Processing Conference, presented last week by Financial Technologies Forum (FTF).
A participant on the conference panel, “Closing the Loop o Client Notification,” who works for a service provider knows of a client that declines to use the offerings of the financial services messaging cooperative SWIFT and prefers fax machines. The panelists acknowledge that there are often cases when providers have to do what their clients want, which includes supporting manual processes. “[However] we have to be the change agents and make people feel confident about the technology,” the panelist says.
Once clients develop greater confidence in new technology the way forward is easier.
Several key technologies such as the ISO 20022 and ISO 15022 standards are causing more firms to embrace automation, say panelists. In addition, The Depository Trust and Clearing Corp. (DTCC) and SWIFT have been combining efforts to help customers move to ISO 20022 via several projects involving major industry players. The DTCC is planning to decommission its legacy CCF files over the coming years while supporting legacy messaging and the new ISO 20022-based corporate action information. The DTCC’s ISO 20022 messaging formats will be compatible with the SWIFT, DTCC’s SMART and MQ messaging standards.
But as firms move toward automation or upgrading their systems, it’s essential that they do not burden internal IT staffs that have day-to-day production responsibilities.
The new projects should be taken on by a separate team, a panelist says. The corporate actions technology development team should be kept separate from the IT staff for production because it’s nearly impossible for one team to handle both. “They should be parallel efforts,” the panelist adds.
Getting Ready for Corporate Actions
Looking ahead, service providers will have to adjust to clients needs as they embrace and work in ever-more complex global markets, the panelists say.
On the very cutting edge of demands are client notifications services delivered to mobile devices, which will test the capabilities of service providers. Some devices such as smartphones and tablets have more technology embedded in them than laptops from a decade ago, a panelist notes. Cutting-edge demands from clients will compel firms to explore new security options and new third-party arrangements such as service level agreements (SLAs) “It’s what we have to get ready for,” a panelist adds.
In related news, as U.S. firms get ready for corporate actions automation, the London-based B.I.S.S. Research announced last week that it has signed a joint venture agreement with STP Consulting Solutions to develop an American version of the B.I.S.S. Corporate Actions benchmarking process and accreditation service.
STP Consulting Solutions, founded by Chris Kotsifas in 2007, is based in Garnet Valley, Pa. The company focuses on strategy, assessment, evaluation, and implementation for corporate actions and the back office.
The industry drivers for risk mitigation, operational transparency, greater regulatory oversight via the new cost basis reporting requirements of the Internal Revenue Service (IRS), and infrastructure changes such as the DTCC’s push for ISO 20022 will cause firms to review their operations support for corporate actions, say officials at STP Consulting Solutions. These factors will create demand for their offering, they say.
The agreement stipulates that STP Consulting Solutions will carry out the benchmarking process in the U.S., and B.I.S.S. Research will license its accreditation, officials say.
The accreditation has been designed for many types of financial institutions that have corporate actions operations, and for corporate actions software and service suppliers to the American market, officials say.
The accreditation will provide independent verification for internal and external audits, and will offer the boards of financial services firms with detailed information about the complex operations behind corporate actions notifications. This information is intended to help firms better understand their systems and controls, and thus bolster their corporate governance, officials say.
“It has always been part of our long-term plan to introduce our benchmarking process to financial institutions in the American market,” says Gary Wright, CEO for B.I.S.S. Research and creator of the B.I.S.S. Accreditation, in a prepared statement.
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