VIDEO | The asset servicing industry faces urgent pressure to transform as spiralling costs and inefficiencies increasingly impact investors and issuers. At the session “Driving asset servicing automation: The path to transformation” at PostTrade 360° Nordic 2024, industry experts underscored the need for automation, data quality improvements, and greater issuer engagement.
Accurate data remains foundational for effective automation, emphasised John Kirkpatrick, product manager at Broadridge: “The metrics and business intelligence are only as good as the integrity of the data.” Poor data quality leads to costly manual touchpoints, he explained, noting that efforts to analyse and normalise data can help pinpoint inefficiencies. “If you can get that, you can see immediately where there are issues and what can be fixed,” he added, underscoring that even small improvements in data processing can significantly enhance Straight-Through Processing (STP) rates.
Watch the session video here!
• When logged in, pick up your free access pass for this Nordic conference if you haven’t. Then browse back to this page, and the video will show up in this box.• Don’t have an account here yet? Register here. This is separate from the event platforms where you may have been signed up as a delegate.
• Login
(Confusing? Follow our 2-min video guide here.)
Digitising corporate actions at the source
Singapore’s model of mandating issuers to digitise events upon announcement emerged as a promising solution. Kirkpatrick noted, “Issuers in Singapore are mandated to digitise the event at issuance, at announcement,” a move that has led to noticeable STP improvements in the region. Broadridge has taken a similar approach in the U.S., working with DTC and transfer agents to develop standardised event templates. This, he explained, supports the “flow of that process from announcement through to DTC and then out to the client,” creating efficiencies across the data chain.
While automation offers clear benefits, a one-size-fits-all approach is insufficient, according to Armanda Mago, Europe custody head at Citi. “Voluntary events need more collaboration with issuers, investment bankers, and lawyers to clarify their implications,” she said, emphasising that specific event types require tailored solutions. For example, Mago suggested using a governance ranking to encourage issuers to adopt better data practices, noting, “Why don’t we have some kind of punctuation or ranking for the issuers regarding this and make it public to really move forward these types of complexities that we have in the local market?”
Closing the gap
Panelists identified a major challenge in the lack of direct communication between issuers and investors. Bill Hodash, ISSA Working Group coordinator, pointed out that issuers are often unaware of the high costs poor data quality imposes on investors and intermediaries. “The industry needs to facilitate a conversation between the investor segment that’s dealing with these increasing costs and the issuers who may not fully understand the impact,” he said. This facilitated dialogue, Hodash argued, would help issuers better understand the financial implications of low-quality data, helping reduce operational risks and enhance transparency.
As Barnaby Nelson, CEO of The ValueExchang emphasised, “This cost spiraling is not sustainable,” and without significant improvements in automation, data governance, and issuer collaboration, asset servicing risks continued inefficiencies. With clearer communication channels, standardised data practices, and focused technological investments, the industry can address its current challenges and reduce the burdens on investors in the process.
Panelists:
William Hodash, working group coordinator, International Securities Services Association (ISSA)
Armanda Mago, Europe custody head, Citi
John Kirkpatrick, product manager, Broadridge
Barnaby Nelson, CEO, The ValueExchange
Hosted by Broadridge.
• The consolidated PostTrade 360° Nordic conference, in Stockholm on 4–5 September 2024, came to host 1,200+ delegates and featured 70 sessions.
• Log in and watch the sessions – for free! Links in the grey video boxes on each article will guide you intuitively. Yet, if you still want watch the 2-minute intro to our video offer, click here.
• Our coverage relating to the event is indexed here.
• By the way … are we connected on LinkedIn already? Follow us here.
