Conductor

2005 Consensus Software Awards

Product Description

When comparing the Broking industry to the Funds Management industry on timely processing of applications and reliance on paper, we have the Broking industry at one end of the spectrum and the Funds Management industry at the other.

The Broking Industry in Australia on one hand has one of the more efficient Shares Trading and Settlement processes in the world due to wide uptake of technology throughout the industry.  However, within the Funds Management industry, true Straight Through Processing (STP) from the Financial Advisers desktops to the back office systems of the Financial Providers lags well behind.  Most applications can take weeks to process once an investor completes an application with their Financial Adviser.

Imagine being able to reduce the turnaround on financial applications from weeks to seconds.  Conductor will enable this to happen.  It is an electronic messaging system developed by InfoComp and is designed to automate many of the paper-based tasks that currently occur within the Funds Management industry.

What does Conductor do?

It receives Investment applications and redemptions via the Internet with full validation and processing capabilities using the same validation rules that are applied when entering data directly into the back office administration system.  It is intended to provide for Financial Advisers processing of applications via the web in addition to allowing investors to enquire and transact on their investment accounts.  In essence, we have focussed on providing Financial Advisers with the ability to transact on behalf of their clients and enquire upon their members’ transactions and commission records.

Conductor is focussed on the high volume transactions that financial advisers are faced with that would provide themselves and their clients with the most amount of value.  These are primarily investor applications and contributions, redemptions and switching of money.  In addition, it is also possible to enquire upon member details including balances and transaction history and update personal data.

Security has also been paramount in our design of Conductor.  We have three stage security: HTTPS, MD5 and Composer Alias Security.  This provides for multiple gateways of accountability and data protection.

Innovation

The Funds Management industry is becoming increasingly focussed on reducing costs in administration and in processing efficiencies.  The process followed by most institutions in the case of investment applications is:

• an investor will visit a financial planner for advise

• the financial planner will use a desktop financial planning solution for financial modelling and advise and work with the client to develop a strategy to meet the clients financial requirements

• a paper application form will be completed between the financial planner.

• The form will be signed by the client and will be submitted by the financial planner to the financial institution for processing.

• It could take anywhere from a few days to a few weeks for this application form to be processed by the financial institution and for the institution to send a confirmation message back the financial planner advising them that it has been processed and what the investment account details are.

This process can be replaced with the following:

• an investor will visit a financial planner for advise

• the financial planner will use a desktop financial planning solution for financial modelling and advise and work with the client to develop a strategy to meet the clients financial requirements

• the adviser will complete an online application form (not paper based)

• the application form is sent via the Internet to Conductor and Conductor will perform validations processing in accordance with the business rules that the financial institution has stipulated

• if the validations are met, Conductor will interface with the back office administration system, the account will be processed immediately and a confirmation message is sent back to the financial planner.

The account is established in a matter of seconds with no delays as encountered using the established practice.

The benefits Conductor brings to a Financial Institutions operation are numerous:

• Administration costs greatly reduced through increased business automation

• Efficiencies through single data entry of investment application data

• Processing controls:  full validation with Back Office application resulting in improved accuracy

• Improved Productivity:  marked reduction in administration processing times

• Truly scalable providing increased productivity and deployment options

Conductor receives messages in SwimEC format (Super, Wealth & Investment Management Electronic Commerce).  The SwimEC program is an initiative of the Superannuation and Funds Management industries in Australia that aims to deliver industry-wide cost reductions and efficiency gains by promoting industry message standards for electronic commerce.  To date, InfoComp is the only administration systems provider that has adopted these standards and implemented them into a financial institution.

Performance

The Funds Management industry is a paper driven industry and it is not uncommon for investment applications to take weeks to process.  Conductor provides a Financial Institution with the ability to receive electronic applications immediately from Financial Advisers and to have those applications / transactions processed in a matter of seconds – not weeks.

Conductor provides a Financial Institution with the ability to streamline their processes for Financial Advisers and almost eliminate the need for the paper-based processes that are currently in place.  Scalability is an area that is addressed through Conductor.  Previously, processing new applications and other transactions meant escalating costs or processing delays but the scalability of automated processes means that financial institutions can quickly and cost-effectively process these transactions.

Some estimates have processing transaction costs between $25 and $75 per transaction.  Conductor can effectively halve these costs.  The key issue for businesses is how to get the cost of administration down but at the same time, enable processing volumes to increase.  Conductor now provides them with this ability.

Potential

Financial Service providers have focussed in the past on other areas of automation within the industry.  More and more, they are starting to realise that the focus should be between Australia’s 15,000 plus financial advisers and the investor processing systems because that is where the high number of transactions are and hence where the inefficiencies lie.

As the only true STP solution that has currently been implemented within the Funds Management industry that focuses on the automation of data from the Financial Advisers to the platform providers, Conductor is well positioned to provide other Fund Managers and their Financial Planning distribution network with the same benefits that have been implemented at Credit Suisse Asset Management (Conductor was developed in conjunction with Credit Suisse Asset Management and is the cornerstone of their new Straight-Through-Processing platform).

In addition, other clients of ours have indicated that they would like to explore the opportunity of using Conductor as an integration tool – integrating data from web sites, voice response systems and ICR technology in addition to financial planning software.

Other information the judges should know

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