Technology in the corporate actions industry was a major topic at this year’s CorpActions London conference, with rapid changes in regulatory, client and market demands meaning that companies are having to continually reevaluate their operating models.
Speakers on the ‘Best Practices In Corporate Actions Automation and The Search For STP’, ‘Reimagining the Corporate Actions Operating Model’ and ‘Future-Proofing Models for Asset Servicing’ panels all considered recent industry developments. Panellists discussed where corporate actions departments stand, what is being demanded of them and what they should be doing going forwards.
“It is hard for the operating model to truly change without lots of elements falling into place,” according to Will Stevens, executive director of markets asset servicing at JP Morgan. “Technology, risk and outsourcing must all be taken into consideration before progress is made,” agreed Julie Leigh, global head of asset servicing at Morgan Stanley.
“Rapid developments in the IT space have increased the number of solutions on offer,” said Madhu Ramu, managing director of corporate actions at S&P Global Market Intelligence, but he added that many of these have not yet benefited operational users. The technology available to the industry needs to be brought into operational workflows, he argued, to most effectively benefit the workforce and clients.
Firms must maximise the use of technology to increase levels of automation and decrease levels of doubt, Ramu continued. This was an idea echoed throughout the conference, with Morgan Stanley’s Leigh agreeing that making existing infrastructure more scalable should be a priority. JP Morgan’s Stevens acknowledged that abandoning legacy technology will take time, but stated that a single platform was the ultimate goal that the industry should be working towards.
Cost may also be a concern, as Steven Edwards, EMEA corporate actions manager at Invesco noted during the earlier ‘Best Practices In Corporate Actions Automation and The Search For STP’ panel. Automating particular pain points and using in-house technology to its maximum efficiency can be a lower-cost solution for many companies, he added.
Artificial intelligence (AI) is also a growing element of the industry’s technology, which Sanjay Prasad, Head of Capital Markets and Wealth Management, US, Canada and UK at TCS BaNCS, suggested companies must use for a specific purpose or risk adding unnecessary complexities to their operations. He suggested a gradual approach, embracing ‘AI-assisted’ technology, which still incorporates human intervention, before considering an ‘AI-enabled’ approach.
The issue of unnecessary technology additions expanded across the panels, with Michael Collier, executive director of product management at JP Morgan, summarising that firms need “the right technology for the right solution for the right purpose”. Onboarding new technology without consideration of how it will benefit end users is likely to cause reputational damage and further problems down the line, he added.
Along with AI, cloud technology has also been a considerable change over recent years, and has received widespread acceptance according to TCS BaNCS’ Prasad. Rather than a solution to a single problem, the cloud allows for the “fungibility” of market intelligence, data and people and provides data access and interconnectivity, he highlighted.
Considering what the industry needs to do to adapt to this fast-moving environment, panellists agreed that collaboration between companies is something that needs to become commonplace. Collaboration is ‘the future’, according to Paul Duffy, product head at Xceptor Tax Solutions. Firms must focus on the ‘end-client benefit’, with external cross-organisational and internal cross-departmental collaborations needed to deliver improved services to customers.
Although there is a ‘nervousness’ to collaborate, with risks of data liability making firms hesitant to share information, TCS BaNCS’ Prasad affirmed that industry networks are gaining more interested parties. Companies are often working on the same solutions, and with current budgetary concerns, it is prudent to work together to achieve goals that benefit both parties, added Suman Bhadresha, managing director and global head of product delivery for markets and securities services at HSBC Security Services.
Across the panels, it was agreed that flexibility is essential. Operations must be scalable, automation must be prepared to deal with variable data quantities and firms must be ready to quickly change platforms and operations to keep pace with the rest of the industry.
Corporate actions divisions will need to work quickly, and with agility, to keep up with the range of demands they are facing. However, the efficient use of new technologies, the full utilisation of existing technologies and industry-wide collaboration can help to ease the strain.
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