FundSERV Update

Agenda
1.
2.
3.
4.
5.
6.
7.
8.
9.
FundSERV’s Current State
3 Year Strategy
Operational Excellence
Customer Outreach
FUNDcom +
Systematic Plans & Advisor Database
Exchange Traded Funds (ETFs)
E-Solution
Fund Information Repository
Total Trades
Transaction Type
4
Millions
Millions
(as of August 2013)
FundSERV’s Current State
3
14
12
10
2012
2
8
2013
2012 (YTD)
6
1
2013 (YTD)
4
2
0
0
Buy
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Sell
Switch
Internal External
Transfers Transfers
Buy/Sell Ratio
Total File Size
Billions
(as of August 2013)
70
1.6
60
1.2
50
40
2012
30
2012
0.8
2013
2013
0.4
20
10
0
0
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Q1
Q2
Q3
Q4
Operational Excellence
Improve Availability
 Disaster recovery failover automation to an active/active
failover architecture
 Review of current backup strategies
 New Alert Monitoring process – internal and external
 Security and data loss
 Monitoring of access to customer private data
 Action plan for improving readiness for cyber threats
Operational Excellence
Technical Support
 ITIL based service helpdesk ticketing system
 Incident, request and problem management reporting
 Integration with CRM and other FS applications
 Change Management process
 Self serve portal for customers
FundSERV Standards v24
“Last big step to XML”
FundSERV was created in 1993 by key manufacturers and IIROC
dealers




FundSERV tasked to publish and enforce
Initial file was the Transaction Reconciliation (AT file) built as a 660
byte fixed length file – other files followed this format
Changes to industry requirements (regulation and product) and new
FundSERV service offerings have been made to fit the limitations of a
fixed length file
The needs of the industry as a whole require forward thinking as
opposed to reactive changes
Issues being Resolved
 Flexibility and Customization – open model allows for customization by
individual or mini-lateral segments of the industry
– Fixed length file limitation removed - ability to add new fields/values by
product or industry segment
– Increasing regulatory scrutiny – increased reporting of client accounts
– Reduced costs of annual releases - remove the requirement that all of the
fund industry must make changes at the same time
 Industry Dependencies and mandatory standards – decisions to develop
data standards will be driven by firms CBA’s
 Interoperability - XML is widely used in messaging applications within the
financial services industry
FATCA
 FATCA related standards implemented on November 18, 2013
⁻
Regulations have not been finalized, standards are subject to change
 To facilitate the FATCA information exchange, the Standards will be
enhanced as follows:
⁻ New FATCA sections within the account setup section
⁻ New elements and a new NFU message will be created
⁻ Position reconciliation and FUNDcom will be enhanced
 Global reporting requirements and tax withholding are out of scope
Customer Outreach
Customer Outreach
 Increase customer interactions
 Expand our focus across the entire fund industry
ecosystem
 Create ‘Voice of the Customer’ program
 Improved CRM tool
 Improve data mining capabilities
Customer Outreach
Survey says….
I count on FundSERV Inc.
to deliver services
flawlessly and securely.
FundSERV should be
more innovative.
Strongly
Agree
Agree
Disagree
Strongly
Disagree
Strongly
Agree
Agree
Disagree
Strongly
Disagree
75.69%
24.31%
0%
0%
18.31%
48.36%
32.39%
0.94%
FundSERV should
assume a greater
voice in our industry.
My company looks to
FundSERV
for industry knowledge.
DISAGREE
16.90%
STRONGLY
AGREE
33.33%
Strongly
Agree
Agree
Disagree
Strongly
Disagree
Strongly
Agree
Agree
Disagree
Strongly
Disagree
32.39%
49.77%
16.90%
0.94%
33.33%
48.36%
16.9%
0.94%
FUNDcom Plus
FUNDcom Plus
New Features
Improved web analytics
Consolidated views from
multiple fund companies
Business intelligence
on existing data
Browser/Platform Support
Multi schema support
including new messages
Centralized Systematic Plans
 Aging population causes increase in SWP’s
 Set up and maintenance of PAC/SWP’s are manual –
resulting in faxes, paperwork and NIGO
 NSF and resulting transaction reversals are manual
 Fund Company = ~ 1 million additions, changes and
terminations
Centralized Advisor Database
 Central database of securities advisors
– Demographics
– Contact info
– Licensing
 Permission Management – sharing of financial
advisor info
 Branch Code
 Commissions and trailer payments
Exchange Traded Funds (ETFs)
 MFDA dealers need a cost effective facility to offer
ETFs to their clients
 Collaborating with the Federation of Mutual Fund
Dealers, CETFA and the TMX
 Discussions in early stages
FundSERV E-Solution Overview
Issue:
The fund industry is paper intensive causing cost and
risk concerns for both nominee and client name
accounts. Solutions exist but at high costs and without
standardization.
Opportunity:
An electronic document workflow service with esignatures, centralized document repository and
configurable workflow for distributors and
manufacturers.
FundSERV E-Solution Overview
Electronic account opening with E-Signature
Pre-filled Client Data
Straight through processing direct to manufacturer and
brokerages platforms
Reduce NIGOs and manual errors
Increase processing speed from end to end
 DST is the partner for the interface, database and workflow
Industry Benefits
Industry Wide (Manufacturers and Dealers)

Reduction of costs related to FTE (QC, rejection & follow up, imaging preparation, manual
preparation of paperwork), courier, on and offsite storage & retrieval costs

Process consistency while retaining firm specific configuration/branding

System edits will result in reduction of paper based errors, missing information, forms,
signatures (NIGO) otherwise resulting in follow up and delays

More compact & efficient central repository for all documentation – simplified & quicker
(including remote) access with additional security levels for storage of sensitive client
information

Audit trail of all activity related to account opening/trading
Advisor/Branch

Improving ease of doing business – enhanced client experience

More time for marketing and sales vs. administration
Fund Information Repository
Issue:
The industry repository of reference and market fund data
is currently provided by commercial entities.
Opportunity:
An industry utility could provide this commodity service on
a cost recovery basis leaving value added services such
as analytics, risk ratings and data dissemination to
distribution to commercial entities/partners.
Future State
 Industry Data Dictionary maintained by FundSERV
 “Golden Copy” security master of reference and market data
 Reference data validated against regulatory documents
 Alerts to interested parties of new or changed fund data
 Industry participant portals to populate or retrieve data
uestions