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Tuesday 19 November 2019


Cross-border funds see record high processing automation rates

Written by Sunniva Kolostyak

Industry automation rates reached 90.4 per cent of cross-border fund orders in 2018, according to a joint report from the European Fund and Asset Management Association (EFAMA) and SWIFT.

The report covers the evolution of automation and standardisation rates of fund orders received by transfer agents in the cross-border fund centres of Luxembourg and Ireland, in order to highlight the progress made towards the increased automation of amount of fund orders and the use of ISO standards.

Based on numbers reported by 29 survey participants, the total volume of orders processed reached 39 million last year, and the total automation rate of processed orders of cross-border funds increased to 90.4 per cent in Q4 2018. This is up from 88 per cent in Q4 2017.

The use of ISO messaging standards rose from 55.5 per cent to 58 per cent during the same period, while the use of manual processes dropped from 12 per cent to 9.6 per cent.

Commenting on the report, EFAMA director general Tanguy van de Werve said: “Since the launch of this publication 10 years ago, we have been confident that the automation rate of the orders of cross-border funds would eventually increase above the 90 per cent mark. And so it has.

“In today’s fee-pressure environment, fund managers are keen on improving the overall efficiency of their operations. This trend is expected to continue. To the extent it facilitates the processing of cross-border fund orders, this increased automation is good news for the single market.”

The total automation rate of orders processed by transfer agents in Luxembourg reached 89 per cent in Q4, from 85.4 per cent in Q4 2017, with the ISO automation rate increasing from 69.8 per cent to 72.2 per cent. The use of manual orders dropped from 14.6 per cent to 11 per cent.

Irish transfer agents only saw a slight increase in the total automation rate of orders processed, from 92.1 per cent to 92.8 per cent. The ISO automation rate increased from 32.5 per cent to 34.7 per cent, whereas the use of manual processes dropped from 7.9 per cent to 7.2 per cent during the same period.

SWIFT manager, investment funds, standards Janice Chapman added: “Yet again, we see growth in the volumes of automated cross-border order flows and funds transfer flows with more markets making plans for automation. This is, indeed, reinforcement of the industry trend to automate using the ISO 20022 standards.”

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