The European Fund and Asset Management Association (EFAMA) published in cooperation with SWIFT, a new report on the evolution of automation and standardisation rates of fund orders received by transfer agents (TAs) in the cross-border fund centres of Luxembourg and Ireland in the first half of 2013.
The report confirms that the total volume of orders increased by 15% to 14.3 million compared to the second half of 2012 with 12.5 million orders.The automation rate and the use of the ISO standards in the fund industry remained stable at 77.8%(from 77.7% in December 2012).
The report is an on-going campaign by EFAMA and SWIFT to highlight the advancement of automation and standardisation rates of orders of cross-border funds. Participating in this survey were 32 TAs in Ireland and Luxembourg, representing more than 80% of the total incoming third-party investment funds order volumes in both markets.
The report highlights are as follows:
The total automation rate of processed orders of cross-border fundsincreased to 77.8% in the second quarter of 2013, compared to 77.7% in the fourth quarter of 2012.However, the rate of standardisation progressed by 2.6 percentage points, reflecting a fall in the use of proprietary File Transfer Protocol (FTP) formats.
The total automation rate of orders processed in Luxembourg increased by 1.2% to reach 74.9%. This increase was driven almost equally by a greater use of ISO messaging standards and proprietary FTP.
The total automation rate of orders processed in Ireland decreased to 83.9% in the second quarter of 2013, compared to 85.3% in the fourth quarter of 2012. Still, the percentage of automated orders based on the ISO messaging standards increased to 23.5% in the second quarter of 2013, compared to 19.3% in the fourth quarter of 2013.
Peter De Proft, EFAMA Director General, notes : “The progress of automation and standardization continued during the first half of 2013, thanks to a greater use of ISO messaging standards. This is good news for the industry as greater automation goes hand in hand with improved cost-efficiency. Looking forward, reaching a total automation rate of 80% supported by a 50% ISO standardization rate should remain a medium term goal.”
Fabian Vandenreydt, Head of Securities Markets & Core Business Development, SWIFT, adds: “Although there has been very little movement towards automation in the last six months, an increase in total order volumes, combined with an ISO progression away from proprietary FTP, continues to demonstrate the priority that the industry has set to itself in the evolution of funds processing standardisation. It remains however crucial to pursue the quest towards more automation, and to decrease the level of manually processed orders. This is where a revamp of a large-scale Kill the Fax programme might be important to deliver tangible results.”