Single system offers huge savings
The managed funds and master trusts industry could save up to $700 million per year if it adopted an information exchange, which would provide standardised electronic data transfers.
MFundEC interim governance and structure working group member Keith Finkelde made the comments as part of his presentation at a recent Master Trust and IDPS Industry Forum in Sydney.
The MFundEC group is based on a similar model working within superannuation, SuperEC, with both seeking to create a single set of standards for information interchange in the back office between fund managers.
Finkelde says the cost savings for the industry in such a system would be around $700 million as it would cut out a high level of manual preparation and rekeying of data.
"The current methods result in poor quality data, long timeframes to receive or exchange data and a high manual effort and reconciliation functions," Finkelde says.
"The opportunity now is to remove these hurdles and replace them with standardised electronic interchange of data, as well as automated straight through processing."
However Finkelde says the idea is still threatened by vendors setting the agenda, the system becoming too technical or not receiving wide spread industry support.
"The system will always be complex but the industry has to own the problem and do something. This means that we will also ask fund managers to contribute funds to the system as the voluntary work is no longer sufficient," Finkelde says.
The project is presently seeking to form a number of bodies which will cover standards and governance and is slated to be running by the second quarter of 2002, with the first implementation of the plan and systems to have occurred by the end of the first quarter next year.
AUTHOR
Jason Spits
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