Although many securities and investment houses have automated some of their back office processes, corporate actions remain one of the few areas which have yet to reap the benefits of process automation.
According to Mark Ehmke, MD of Staffware SA, in most financial institutions, the processes for handling corporate actions are predominantly paper-based, difficult to manage, open to discrepancy and can be both time and labour-intensive.
"As corporate actions often have to be processed as close to the deadline as possible, this may require a number of events to be processed concurrently. Similarly, fragmented processes, the need to re-key data between faxes and reports and the level of complexity involved all present a number of challenges for processing corporate actions," he believes.
"Workflow technology can address these challenges through process automation: improving the speed and efficiency of corporate actions processing and integrating it into the business environment."
Among the market drivers that will encourage these institutions to adopt workflow is increasing pressure to shorten transaction settlement cycles, volume volatility and sensitivity as well as the need to attain transaction deadlines and comply with regulatory requirements, Ehmke says.
A new addition to Staffware`s workflow technology is its Corporate Actions solution, which has been designed to automate and manage the processing and monitoring of corporate actions and events in financial institutions involved in the processing of securities, including fund managers, custodians, brokers and third party administrators.
"Through process automation, the solution enables data to be accessed timeously and efficiently, and simplifies and automates the manually tracked processes of corporate actions, thus reducing the risk of error," he says.
The Staffware Corporate Actions solution has been designed to:
Link easily into existing front and back office systems and interact with underlying business systems
Receive feeds from various sources, for example, Reuters and Bloomberg, to initiate corporate actions processes
Track and process mergers and acquisitions, class actions, bankruptcies, name changes, splits and other corporate actions
Manage all key dates within the processes by driving all deadlines relating to these dates and tracking those users who do or do not complete the processes
Provide full audit trail facilities to aid compliance and operational risk management
Proactively deliver timely and accurate corporate actions information
Manage exceptions. For example, if holdings fail to reconcile with custodian holdings, Staffware routes the case to the appropriate user for investigation and actioning
Generate notifications to the custodians
Monitor the status of the corporate actions processes and alert the compliance department if deadlines are about to be missed and default action needs to be taken.
Among the components of the Staffware Corporate Actions Solution are the Graphical Workflow Definer, a set of business rules are defined which graphically map out the corporate actions processes; the Staffware eBanking Process Engine, which manages the business processes associated with corporate actions; the Corporate Actions Template, which works with the process definitions to provide the forms, data collection and processing of transactions and data; the Work Queue Manager, providing support for rich, Web and mobile clients; and Staffware Enterprise Objects, which provides an object model of the Staffware eBanking Process Engine and functions.
Ehmke says the solution provides significant improvements in speed and efficiency of corporate actions processing and increases profitability by avoiding costly errors, duplication and non-conformance.
"The enhanced customer service and capability to actively monitor service levels leads to greater productivity because it reduces the effort needed to process corporate actions `right first time on time`," he adds.
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