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Measuring Operational Risk: Part Science, Part Art |  Licensing Ops Execs: Great Idea, Bad Execution? |  Reducing Operational Errors With OTC Derivatives |  A DAY IN THE BACK OFFICE:
Eliminating Operational Risk at a Transfer Agency
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A DAY IN THE BACK OFFICE:
Eliminating Operational Risk at a Transfer Agency

May 4, 2011
By Chris Kentouris

Computershare also uses a telephone system with Interactive Voice Response (IVR) to give callers answers to frequently asked questions without having to connect with a representative. But in the end, when a shareholder does want to speak with a live human representative, Computershare will record both the phone call and take snapshots of the call center employee’s computer screen to monitor how well and how quickly he or she is using Computershare’s technology, says Robert Cahill, manager of quality and training at Computershare’s communications center in Canton.

A separate team of quality control coaches will take a sampling of calls for each call center representative each month.

They will monitor the length of the call as well as its effectiveness. That means whether or not a customer’s request was satisfied in the first call; the empathy and responsiveness to the needs of the customer as well as the technical skills of the representative in responding to the question.

“Representatives are evaluated based upon their quality scores, and receive additional coaching and training as necessary to ensure they deliver excellent service,” says Cahill.

By constantly reviewing interactions with shareholders, says Cahill, Computershare has raised shareholder satisfaction 10 percentage points to more than 90 percent in two years. The agency has also simultaneously blocked unauthorized access to registered shareholder accounts.

Like all transfer agents, Computershare needs to keep up with new regulations and 2011 has actually proven to be the most significant year in over a decade. For one, the Internal Revenue Service’s cost-basis reporting rules have begun to take effect. They require transfer agents and other financial intermediaries to provide investors and the IRS with the accurate cost of their accounts so that the correct amount of taxes can be paid.

That required Computershare to reprogram all of its middle and back-office operations to do the calculations and issue the reports. Not only did additional data need to be captured and stored, but all customer and employee interfaces need to be adapted to view, change and select the type of methodology the investor wants Computershare to use in calculating the cost-basis.

The Iceberg

That’s just the tip of the iceberg. “Every communication center representative and other employee interfacing with customers had to be taught the basics of cost-basis reporting,” says Jason Stout, senior manager for Computershare’s U.S. communication centers. “A separate dedicated team of phone experts also had to be trained in answering more complicated questions -- such as the types of methodologies Computershare could use to do the calculations,” But they can never cross the line to provide tax advice.

Adding to the operational strains Computershare faces is the simultaneous need to comply with the SEC’s new so-called say-when-on-pay requirement, which took effect on January 21. Corporations at their first annual meetings must allow shareholders to vote on executive compensation in their proxy statement at least once every three years and must allow them to determine whether “say-when-on-pay” votes will take place every one, two or three years or whether they will abstain.

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