US fund administrator UMB Fund Services has agreed a deal with banking software provider Temenos to modernise its exchange traded fund (ETF) services technology platform.
Under the terms of the agreement, the Temenos’ Multifonds platform will provide UMB the technology foundation for a more customisable ETF service offering.
Using Temenos’ FundSuite, which allows consolidation of fragmented and manual ETF systems onto a single accounting and operations platform, UMB will be able to provide full coverage of all physical ETF specifications.
“Through Temenos’ Multifonds platform, we can extend our industry-leading reputation for high-quality accounting and administration services, to include ETF servicing capability, with the integration points, processing controls, and comprehensive reporting options our existing and future clients expect,” said Maureen Quill, president, UMB Fund Services.
“As the ETF market continues to grow, this partnership will keep UMB at the forefront of ETF fund servicing to support current opportunities and meet market requirements for future growth in this segment.”
The ETF sector has been one of the fastest growing asset classes over recent years, breaking through the $5 trillion milestone at the end of January this year. Many fund administrators have highlighted the importance of the ETF to their growth plans, with Citi planning to launch a European ETF administration service this year.
However, according to a recent study by Temenos, operational technology and systems were highlighted as the main challenge for the ETF industry growing further.
“To be effective, they [administrators] must have the operational technology in place to service ETFs quickly, efficiently and accurately, which is exactly what UMB is doing by partnering with Temenos,” added Oded Weiss, managing director, Temenos Multifonds.
Earlier this year, Temenos signed a multi-year contract with Northern Trust to help modernise the bank’s transfer agency technology.