Industry automation rates for cross-border fund orders reach nearly 92 per cent

EFAMA, in collaboration with SWIFT, has published a new report on the evolution of automation and standardisation rates of fund orders received by transfer agents (TAs) in the cross-border fund centres of Luxembourg and Ireland during the first half of 2020.

The report highlights the progress made towards the increased automation of the amount of fund orders, and the use of ISO standards.  Twenty-eight TAs from Ireland and Luxembourg participated in this survey.

 
The report reveals that the total volume of orders of cross-border funds increased by 2.9 per cent to 23 million orders in the first half of 2020, from 22.4 million orders in the second half of 2019.

The total automation rate of orders of cross-border funds meanwhile, remained stable at 91.9 per cent in the first half of 2020. The use of ISO messaging standards dropped from 62.3 per cent in Q4 2019 to 57 per cent in Q2 2020, while the use of proprietary file transfer protocols (ftp) increased to 34.9 per cent in Q2 2020, from 29.5 per cent in Q4 2019.

In addition, the total automation rate of orders processed by Luxembourg-based TAs decreased to 89.4 per cent, from 90.2 per cent in Q4 2019. The ISO automation rate decreased from 76.6 per cent in Q4 2019 to 75.2 per cent in Q2 2020, while the use of proprietary fund transfer protocols (ftp) rose from 13.6 per cent to 14.2 per cent during the same period.
 
Finally, the total automation rate of orders processed by Ireland-based TAs increased from 94.6 per cent in Q4 2019 to 95.3 per cent in Q2 2020. The ISO automation rate decreased from 36.6 per cent to 33 per cent during the same period, whereas the use of proprietary FTP went up from 58 per cent to 62.3 per cent.
 
Tanguy van de Werve, Director General of EFAMA, says: “Whereas globally the average automation rate of orders of cross-border funds remained stable at around 90 per cent during the first half of 2020, it should be possible to further reduce the share of orders incoming from the APAC and Americas that are still manually processed.  Progress towards greater standardisation in these geographies would reduce operational risks and costs and further increase the competitiveness of UCITS”.
 
Janice E Chapman, Manager, Investment Funds, Standards, SWIFT, adds: “Whilst order volumes have increased overall, the fund volumes of ISO 20022 messages on SWIFT show a slight decrease and this is, perhaps, a reflection of the unusual circumstances facing the world in 2020.”