April 7, 2011 | WHITE PAPERS

Automation Is the Answer

Although the alternative funds space can be unpredictable, it is an undisputed fact that a demand for greater transparency will be one of 2011's key features, and for many, one of its most significant challenges. Increased transparency will mean extensive and comprehensive reporting requirements, the time and cost pressures of which are set to leave fund managers and administrators reeling. These threats can be turned to opportunities however, through the use of robust, efficient automation, argue Alan Raftery of KOGER®. With extensive experience in providing seamless reporting solutions which cater to a wide range of stakeholders, Raftery advocate a progressive solution which allows for not only transparency, but efficiency.

HFMWeek (HFM): How has increased investor appetite for transparency and flexibility affected both fund managers and administrators?

KOGER®:The effect has, quite simply, been profound. Transparency and flexibility have become buzz words, and it is important that their use does not become a cliché as I would argue that they are increasingly key requirements for both fund managers and fund administrators. In the last two years many firms were distracted from long-term measures by the need for firefighting and, as a result, put the need for technological solutions to investor demands for transparency on the back burner. Now that we are emerging from the crisis however, those who remain are moving with the shifting investor sentiment and realising the need to prepare for any potential future turmoil. In a post-crisis world this means having robust, transparent measures in place.

We are huge advocates of transparency and flexibility, and believe that automation can play a key role in bringing them about. We are seeing an emerging trend of investors requiring additional detail on underlying investments, and have been able to develop a module in our transfer agency platform, NTAS®, which caters for this. NTAS® also allows those administrators dealing with more complex fund structures to retrieve any information they might require quickly and easily, allowing for real time, online updates on the entire structure of a whole range of fund types.

HFM: How can technology ease the burden of increased reporting obligations?

KOGER®: Some fund managers are finding that providing such high levels of transparency can comprise their proprietary strategies, and that the high volume of detailed reporting requests from clients can draw away time from other activities. Robust, sophisticated technologies, such as the ones we have already developed at KOGER® however, provide multiple parties with easy access to high-level detail.

It is really a question of empowering not only your clients but also their customers, and our ETAS® web Front-End makes this happen. Its push-pull information dualism pushes information to a range of underlying clients, allowing them to access the information when and where they choose, in the format that they want, and with the detail that they need.

This reduces the burden of the administrator and manager in terms of the time taken in responding to client requests, and gives clients the comfort and satisfaction of knowing that they have all the information they need at their fingertips.

HFM: What are the key benefits of automating processes? And how can they be mitigated?

KOGER®: In terms of risks, automation is more of a mitigator than a creator, and eliminates various other risks such as human error. It is key to remember however that automation is only as good as its supervision. At KOGER® we believe stringent checks must be carried out to ensure that automation is applied within certain parameters. In terms of streamlining, flexibility and efficiencies, a monitored, well-structured automation process can make a world of difference.

Aside from the substantially reduced risk of human error, automation has several benefits, including: ensuring cost- and time-saving; re-allocation of staff to value-adding processes such as servicing clients; and enhancing the product offering to clients. With something like incentive fee calculations the benefits are almost immeasurable because clients are no longer depending on spreadsheets and have all calculations, history and reporting available on NTAS®. If there was a risk it would be that STP still requires an element of human review and this control needs to be stringent.

HFM: What are the key features of Straight Through Processing (STP) and what advantages does KOGER® product offering provide in this area?

KOGER®: The key features of STP are the seamless, fast, scalable and efficient transfer of data in a manner which eliminates human error, and the drive for STP has been an objective for the market for a long time now.

KOGER® clients have a competitive advantage in that we offer a versatile solution that can push and pull any amount of data to any system. Our middleware product, GRID®, allows for information to be uploaded into NTAS® in bulk, instantly. It is simple to use, and operates on a client-specified time frame which allows clients to calibrate data whenever they choose.

HFM: In what way has your partnership with the Society for Worldwide Interbank Financial Telecommunications (SWIFT) contributed to KOGER® success?

KOGER®: It has made KOGER® an industry forerunner in that NTAS® is the first system to be able to send and receive ISO 20022 alternative messages for Custody and TA. This is poised to become the mainstream communication tool between administrators in the alternative world, and when this shift takes place KOGER® and our clients will be in an excellent position, having had the technology up and running for some time. Once ISO 20022 alternative messages are widely used in the market then KOGER® client base will be able to incorporate this functionality into their operating model with minimal fuss.

HFM: How do you predict the Irish fund services space will change in the year ahead, and how will KOGER® best position itself to respond to these changes?

KOGER®: The Irish funds industry is such a valuable brand that changes in the year ahead can only be positive. We look forward to a return to pre-crisis numbers of fund launches, and the challenge of administering more and more complex structures with NTAS®. We are making preparations on the compliance side for FATCA and AIFMD and we are talking to clients about this.

Ireland will continue to grow as the world leading service provider for alternative assets as we have the expertise to cater for the challenges that lay ahead with the likes of UCITS IV and FATCA. SWIFT could play a big part in the development of the funds services space in the year ahead as more and more market players look into sending ISO 20022 messages. This is just one example however of how KOGER® is positioning itself to make the most of the opportunities 2011 will hold, and we are investing in research and development to ensure that we stay ahead of the market when it comes to technological developments.

We are very much a proactive company, and are committed to working with our clients as partners to develop new and innovative products which meet their individual requirements.


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