A global industry-owned messaging service is working behind the scenes to improve efficiencies and drive down costs for financial advisers.
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is piloting an automated messaging system within the wholesale fund market to slash costs and cut risk.
It aims to slash the average cost of fund transactions from $22 down to 20 cents.
Macquarie Wrap and BT Wrap, as well as fund managers and custodians, are part of the trial. The scheme will be rolled out globally if it is successful.
“What we’re hoping to do is automate everything once it gets to wrap back through the wholesale chain – repayments, the order, all the confirmation, pricing, statements of reconciliation [and] cash flows,” SWIFT Australia securities commercial manager Adam Wilson said.
“All of those things that happen behind the scenes. It’s all happening today, but it’s all paper.”
In Australia, 15,000 wholesale fund-related faxes are sent daily. Between one and two per cent of the messages go missing.
“I took a very personal interest in this when I, as an investor, locked with an IFA with a cheque … and it took a month to get a confirmation back,” recently-promoted SWIFT Asia Pacific commercial head Ian Johnston said.
By this time the unit price had altered, he said.
The electronic messages will be delivered in “real time”. The next move will be to link in wholesale fund payments to the system.
SWIFT is an industry-owned co-operative supplying standardised messaging services and interface software to more than 8195 financial institutions worldwide.
ANZ Custodian Services, Ausmaq, Barclays Global Investors, BT Financial Group, HSBC Security Services, JP Morgan Chase Bank (WSS), National Custodian Services and Vanguard Investments are also involved in the pilot.
