Manual Errors Bane of Fund Managers' Operations
November 7, 2011
Reducing operational risk tops the list of priorities for fund managers, according to a survey just released by CityIQ, a London-based financial services consultancy.
While the sampling in the survey was pretty small -- only 38 firms responded -- the results were indicative of what the securities industry has been striving for over the past years. That is a reduction in manual processing. A full copy of the report can be downloaded here. Officials at CityIQ were unavailable for immediate comment.
About 95 percent of the respondents said that reducing operational risk was critical. Among the key areas cited were the need to automate corporate actions and processing of over-the-counter derivatives.
Fund managers also want to put some of the onus on custodian banks and other service providers to change their procedures. About 80 percent said they wanted their custodian banks to rely on standardized message types which flow through the network operated by the Society for Worldwide Interbank Financial Telecommunications.
Among the other requests: that custodian banks be responsible for updating standing settlement instructions used to settle transactions and take over middle-office processes. A popular concept: eliminating the need to communicate separately with multiple custodian banks in favor of a single portal.
