Platforms

Platforms not forced to use faxes

I&T Magazine Issue 28 - April 2007

Your February edition included coverage of a report by Forrester Research under the banner of “End of the platform bottleneck blues”. In the context of continued use of faxes for managed fund orders the article says “… the industry is forced to continue with such antiquated and error-prone practices because of the lack of uniform electronic messaging standards” and goes on to say that electronic transaction solutions have met with little success.

I have difficulty in seeing how the industry is “forced” to use faxes. Surely this is a conscious business decision by managers and platforms? And as every IFSA member knows, managed fund messaging standards are uniform (perhaps by definition), documented and in use.

Forrester’s research also appears to ignore the fact that there are proven alternatives to the fax machine. For example, some 40 percent of the orders placed with fund managers by Ausmaq are currently electronic through M.fund Exchange – this means no re-keying, automated confirmation, lower risks and faster turn-around for thousands of trades every month. We achieve these benefits for our clients through the use of standard messages, and with systems that incorporate business logic to enable true STP.

Automation is moving in the right direction, with front-end integration (adviser to platform) getting plenty of attention. Progress for down-stream efficiency (platform to manager) is also likely to be faster than the report suggests. The prospect of significant cost reduction, better service, lower operational risk, credible technology and proven providers has created the right environment for change in the wholesale market.

Individual firms can make up their own mind on whether they are “forced” to use faxes in a segment of growing order volumes and ticket size. I would have thought this is one of the easier decisions a professional processing business can make.

Robert J. Brown
Chief executive officer
Ausmaq