Citibank has become the first fund distributor to go live with SWIFT mutual fund message types in Asia. The giant American bank, which is a major distributor of mutual funds in Asian markets, says it has begun automating its mutual fund dealing in the region in order to cut costs, reduce risks, extend cut-off times, and free up staff to concentrate on value-added tasks.
Citibank has adopted the SWIFT mutual fund message types to automate order processing, which is currently manual and labour-intensive. Bank staff distributing funds will now be able to place orders and receive confirmations electronically and, the next day, automatically confirm customer trades without manual processing or use of the fax.
“The huge growth in volume for managed fund products and the fact that banks are growing their share of the distribution, should be paralleled by an improvement and upgrade of services to customers,” explains Vineet Vohra, Regional Director, Investments Business Asia Pacific. “Citibank is pleased to lead the industrys efforts to automate fund dealing, with the adoption of SWIFT standards and market best practices.”
From today, Citibank and Fidelity Investments, the world’s largest fund management organization, will be linked via the SWIFT network, introducing straight through processing for orders for mutual funds. The bank is consolidating the processing into Singapore, its regional processing hub.
Head of regional investment operations at the global consumer group in Singapore, Maureen Low, says the real benefits come from operational efficiency and control. “Straight-through processing also lets us improve customer service,” she says. “With the automation, we can extend sales cut-off times at our branches, giving clients more time to make their investment choices.”
The Executive Director of Fidelity in Asia, Christopher Quinlan, agrees that the use o SWIFT messages by Citibank is a major step forward. “Automating fund distribution is already well accepted in the US, and Fidelity has been leading the charge in Europe, so we are proud to work with Citibank to bring this improvement to Asia,” he says.
The regional director for SWIFT’s securities industry division in Hong Kong, Ian Buckley, can barely conceal his delight. He says fund distribution is a high growth area for many of his customers in the region. “Be they banks, fund managers, trustees or administrators, it makes perfect sense for SWIFT to help its clients achieve STPs benefits,” says Buckley. “This advances the efficiency of the funds industry at large and is ultimately good for all concerned, including the end investor.”
Citibank is currently testing connectivity to other international fund managers, and links to the industrys major names are expected to be ready by the end of year. Citibank also expects all its operations around the region to be linked to the service by the second quarter of 2004.