Trading volume has more than trebled over the past five years. Having an operations platform that can handle major spikes in traffic – particularly those that happen so quickly, as with the Covid-related increase – is vital to asset managers’ future success.
Major events such as the Covid-19 pandemic also drive significant spikes in trading, making it all the more important that asset managers can scale their messaging and processing capabilities.
Asset managers operate with a range of messaging formats. In addition to this, growing transaction volumes and manual processes add extra risks to operating systems. This can harm a company’s reputation. Any errors can be costly to rectify and, in the worst cases, attract unwanted regulatory attention.
Being able to handle high volumes of messages – and react quickly and seamlessly to sudden increases – is a vital feature of modern asset management systems. Automation can play a key role in enhancing these processes, cutting costs and reducing error risk.
Resilient systems
Our data shows that our clients’ volume of deals has more than trebled over the past five years. We also experience more volatility in volumes, demonstrated clearly last year during the initial stages of the Covid-19 pandemic when traffic spiked significantly as investors moved quickly to react to changing circumstances.
To be able to handle such volume increases, both in the short term and the long term, requires cutting-edge technology to enhance straight-through processing (STP) systems and make them more efficient for clients and asset managers.
The concept of STP is not new to financial services – but what many people think of as straight-through processing may not give the full benefits. True STP should not require manual inputs for the majority of tasks and should be adaptable to account for changing rules and standards.
We believe a true STP system should be an automated, end-to-end solution. It should not only deliver messages quickly but standardise them and integrate seamlessly with other systems.
Through automating and digitalising messaging processes, a futureproof system should also be able to give asset managers a clear top-down view of their operations in order to quickly identify and address issues.
Finding the right partner to automate back-office systems and implement STP requires proper due diligence. Investors and fund managers must be able to trust fund administrators and their technology as they rely on accuracy and timeliness. In addition, providers must be able to continually invest in the resilience of their systems and ensure continued scalability as asset managers grow.
Introducing: Babel
Bravura’s Babel is a seamless and scalable financial messaging platform designed to raise efficiency in the distribution of information between asset managers, their clients, and their service providers.
It provides dealing, settlement, reconciliation, corporate action, and account maintenance capabilities that can seamlessly connect with existing and third-party systems. Babel already supports more than 5,000 connections to counterparties.
By connecting to all major industry standard message networks – including Clearstream, Calastone, and Euroclear, as well as proprietary systems – Babel provides a global, scalable and resilient solution.
It is fully transparent, meaning asset managers can get a clear view of their processes and engagements with clients for reporting and regulatory purposes. A top-level ‘dashboard’ facility gives oversight of operations and can help identify themes and problems quickly. Above all, it promotes the adoption of true STP.
As client expectations evolve, asset managers should be more responsive. Automation is the ideal solution as it streamlines day-to-day activities and frees up more time.
Talk to us about how Babel can help your business.
For more information about Bravura and the services we offer for fund administration, please get in touch.
About the author
More Insights
