A recent report by Celent shows financial institutions are spending more on corporate actions automation — approximately $988 million will be spent on corporate actions automation projects from 2006 to 2010 — confirming rumors into reality.
The report suggests corporate action automation has made strides, but a collective solution is necessary to achieve true automation. Celent said the primary concern today is the lack of uniform data standards for corporate actions. Data is often unreliable or incomplete, and many institutions get corporate actions data from numerous sources.
Manual intervention is necessary to correct the data and make it uniforma time-consuming process. STP rates for corporate actions processing will improve only with data standards.
“Industry initiatives, despite clear setbacks, continue to bring a higher level of standardization to the back office on a global basis,” said David Easthope, Celent analyst and author of the report, “Corporate Actions AutomationThe Vendor Landscape Matures.”
Easthope said in a news release that most notably, ISO 15022 standardization is increasingly on the radar screens of operational personnel and senior management teams across the globe.
In the report, Celent evaluates leading corporate actions automation software providers using Celents four-dimensional ABCD vendor view, identifies spending trends and evaluates the status of corporate actions automation across the industry.
Celent found that a handful of dominant vendors, such as Xcitek and TCS, are facing new competition from relative upstarts like CheckFree, SmartStream, and GoldenSource, as well as overseas firms such as Information Mosaic.
While competition is heating up, the good news for vendors is that overall spending on corporate actions automation will increase as a result of demand and a wider variety of vendor solutions, Celent said. Leading corporate actions automation providers should benefit from the uptick in spending and move for more financial institutions to turn to third party providers rather than internal solutions.
The report is intended to be a preliminary guide for institutions planning initiatives and evaluating vendors to enhance automation and STP rates. The vendors analyzed in detail include third party software applications covering the corporate actions life cycle from ADP Wilco, CheckFree, GoldenSource, Information Mosaic, Mondas, SmartStream, TCS, Vermeg, and Xcitek as well as solutions that tackle select parts of the corporate actions process, including Asset Control, ADPs service bureau, Advent, CCH, and Infosys.
This report is a follow-up to Celents April 2004 report, Corporate Actions AutomationSurveying the Vendor Landscape. The 64-page report contains 18 figures and 11 tables.