Rob Gibbs, one of our Management Consultants here at #Fimatix explores and comments on the operational inefficiencies of the processing of manual Fund Orders, current innovation around Fund Order Automation and STP and how our Nova Enterprise solution can provide substantial cost saving and operational efficiencies. In the fast-paced world of financial services, operational efficiency is a key driver of success. To stay ahead, the benefits of organizations streamlining their operations, improving efficiency, and leveraging innovative technologies is a no brainer to help automate for leaner operations and operational scale. Implementing appropriate new technologies is key to allow automation to effectively help reduce costs and improve scalable operational efficiency. Combining Artificial Intelligence (AI) with Straight Through Processing (STP) does exactly this. Using AI to interpret unstructured data in order to feed the required structured data, efficiently and accurately into the STP Fund Order process. This attached article explores the transformative benefits of Fund Order Automation through STP and the use of AI tools to interpret unstructured data using Fimatix’ Nova Enterprise suite of software. This technology empowers fund administrators and transfer agents to revolutionize their fund order management and drive exceptional operational resilience.

In the fast-paced world of financial services, operational efficiency is a key driver of success. To stay ahead, the benefits of organizations streamlining their operations, improving efficiency, and leveraging innovative technologies is a no brainer to help automate for leaner operations and operational scale.

Implementing appropriate new technologies is key to allow automation to effectively help reduce costs and improve scalable operational efficiency.

Combining Artificial Intelligence (AI) with Straight Through Processing (STP) does exactly this. Using AI to interpret unstructured data in order to feed the required structured data, efficiently and accurately into the STP Fund Order process.

This article explores the transformative benefits of Fund Order Automation through STP and the use of AI tools to interpret unstructured data using the Nova Enterprise suite of software. This technology empowers fund administrators and transfer agents to revolutionize their fund order management and drive exceptional operational resilience.

The Power of STP

STP is a method used by financial companies to speed up financial transactions by processing them without manual intervention. While many financial services firms have implemented STP to some extent, there are often lingering challenges with non-STP transactions that can hugely hinder efficiency and incur significant costs. Addressing these challenges head-on is crucial for organizations seeking to deliver value and efficiency at an enterprise level.

Unleashing the Potential of STP Financial Services, the following 6 observations have been made regarding non-STP transactions.

Can you really afford not to address the following:

Non-STP costs

Approximately 80% of order processing costs stem from the 10-20% of manual (non-STP) fund orders. This scenario is prevalent across the market, leading to significant operational inefficiencies and increased costs.

Resource requirements

Supporting non-STP flows demands a large team, often estimated at 10 individuals, resulting in substantial operational expenses of approximately £25K per month. This manpower allocation could be more effectively utilized on value-driven tasks.

Peaks in operational activity

The business cycle events, such as month-end and quarter-end, introduce operational peaks that must be managed effectively. Non-STP processes often struggle to accommodate these fluctuations, resulting in bottlenecks and increased risks.

Employee engagement

With non-STP processes, employees spend a significant portion of their time on mundane and repetitive tasks. Shifting focus to more value-driven activities enhances employee engagement and boosts productivity.

Operational risks

Manual, repetitive tasks increase the likelihood of errors and omissions, particularly in volatile markets. These risks can lead to reputational damage and loss of business due to compensation obligations arising from incorrect orders.

Loss of business opportunities

Inaccurate orders due to manual processing can lead to financial losses if the market moves against them. This highlights the importance of ensuring accuracy and efficiency in fund order management.

Introducing Nova Gateway

Unlocking the Power of STP – Nova Gateway is a hosted fund trading gateway that provides Straight Through Processing (STP) Market Connectivity via SWIFT and other messaging services. It seamlessly connects financial product distributor platforms and back-office functions, delivering operational excellence and unlocking the potential for significant cost savings. Nova Gateway has already proven its value to many renowned fund administrators and transfer agents.

Complex Processes, Data Quality, and Exception Handling: Nova Gateway tackles the challenges of complex processes, data quality, and exception handling that can hinder the implementation of STP. Here’s how it achieves this:

Business rules and validation

Acting as the gateway to the market, Nova Gateway validates all incoming order flows and applies configurable business rules to ensure data integrity. It thoroughly checks and sanitizes the data upfront, increasing STP rates and engaging human intervention only when absolutely necessary.

Ease of implementation

Setting up Nova Gateway is a low-touch process, ensuring a smooth and efficient transition. Our philosophy has always been ‘we build towards you’, preserving your existing interfaces and processes. Financial services companies can seamlessly integrate Nova Gateway with their existing infrastructure, overcoming barriers posed by legacy systems.

Introducing Nova Enterprise

Unleashing the Power of Unstructured Data with Nova Enterprise.

Nova Enterprise is an advanced capability of Nova, it harnesses Artificial Intelligence (AI) to process unstructured data, such as paper-based faxes and emails. Unstructured data becomes structured data, Nova Enterprise pulls out the necessary data points from non-STP order flows to produce STP order flows. Say goodbye to manually keying orders from faxes, emails, and attachments into backend systems. Once non-STP orders are ingested by Nova Enterprise, they become indiscernible form STP flows. By incorporating AI and Machine Learning (ML) into the STP fund order process, organizations using Nova Enterprise can achieve unprecedented levels of automation, scalability, and efficiency. Here’s how Nova Enterprise helps organizations thrive:

Seamless integration

Unstructured data provided in various formats can be seamlessly interpreted by Nova Enterprise’s AI/ML algorithms. It accurately extracts and interprets crucial information, transforming it into structured data that integrates effortlessly with the automated fund order workflow.
Our philosophy has always been ‘we build towards you’ preserving your existing interfaces and processes for STP, ensuring a seamless ‘low touch’ integration.

Reducing manual intervention

With Nova Enterprise, trade orders, including pension contributions, can be processed seamlessly and efficiently without the need for manual intervention. The AI-powered system ensures accurate and compliant processing, eliminating costly discrepancies and delays caused by manual human error.

Conclusion

Embrace the future of operational efficiency Fund Order Automation using STP and Nova Gateway is a game-changer for organizations handling high volume trade orders. By eliminating manual intervention, increasing automation, and incorporating unstructured data processing with Nova Enterprise, financial institutions can unlock unparalleled levels of operational efficiency, accuracy, and cost savings.

The benefits of Fund Order Automation extend beyond time and cost savings. This transformative solution empowers organizations to deliver exceptional customer experiences, gain a competitive edge, and focus resources on strategic initiatives that drive growth. Embrace the power of Nova Gateway and Nova Enterprise to thrive in the digital age of finance.

If you would like to know more about automation for leaner operations and operational scale, please drop an email to our CBO: Sanjeev.dhiman@fimatix.com

Appendix

Financial services companies may resort to using non-STP methods rather than adopting the more efficient and cost-effective STP processes due to several reasons. Some of these include:

Legacy Systems

Many financial institutions operate with outdated legacy systems that lack the necessary infrastructure and integration capabilities for seamless STP. Upgrading or replacing these systems can be complex and costly, leading to the reliance on non-STP alternatives.

Complex Processes

Certain financial transactions or processes may be inherently complex, requiring manual intervention for risk assessments, compliance checks, and regulatory requirements. These complexities can hinder complete automation and make STP implementation challenging.

Data Quality and Validation

STP heavily relies on accurate and validated data inputs. If the data received from external sources or internal systems is of poor quality, incomplete, or inconsistent, it can introduce errors into the process. Non-STP methods allow for manual intervention and data validation to address these data quality issues.

Exception Handling

Some transactions or events may fall outside the standard parameters or require additional scrutiny due to their complexity or risk factors. STP systems may not have the flexibility or decision-making capabilities to handle these exceptions automatically, necessitating non-STP methods and human intervention.

Cost-Benefit Analysis

While STP offers greater efficiency and cost savings in terms of reducing manual effort and processing time, the initial investment and ongoing maintenance costs of implementing an STP system can be significant. For some financial services companies, the cost of implementing STP may outweigh the benefits, making non-STP a more viable option.

Legacy systems often pose challenges when transitioning to STP capabilities. These systems are typically older technologies developed before STP became prevalent, and they may lack the necessary infrastructure and integration capabilities required for seamless STP implementation.

As we return from the festive break, it’s been fantastic to reconnect with Fimatix clients, team members, associates and partners as we look to begin building on the successes of 2022.

Though last year proved to be challenging both for the country and much of the wider international community, we were lucky enough to achieve a number of milestones thanks to the hard work, skill and commitment of those working for and around us. A short summary of our year can be found here.

Now, we’re looking firmly ahead to 2023, and how we can use the transformative power of effective technology to benefit more people, organisations, and wider society.

In the public sector, we’ll be building on our work with Government departments, such as the Home Office and Department for Levelling Up, Housing and Communities, to ensure these and other Government bodies can deliver improved outcomes and efficiencies through digitisation.

The UK’s public services are facing historic levels of strain, which is why we’re committed to providing effective digital transformation, driven by agile working methods and the unparalleled expertise of the Fimatix team.

In the corporate world, digital transformation is also proving more important than ever to ensuring productivity and success, as highlighted by ECI’s Growth Characteristics report revealing that 1 in 5 UK CEOs see digitisation as their biggest challenge for 2023.

The shift from digital solutions being attractive to necessary is fully cemented, with technology able to streamline processes from climate reporting and governance to HR.

It’s little secret that we’ve been building out our services through products such as our Prodigy and Nova tools, to the stage where we now offer a comprehensive, asset-backed offering that brings value to the financial, regulatory and operational sectors in particular.

It’s incredibly exciting to be a part of the UK’s world-leading fintech sector, with innovations in fields such as embedded finance, cross-border payments and decentralised finance, and XaaS all requiring an underlying digital architecture as they breathe new life into the financial services sector.

With all this in mind, 2023 stands to be a year full of growth and opportunity, and we can’t wait to share all the new landmarks and developments that are in store.

2022 has been an important year for growth at Fimatix. We’ve expanded our public and private sector practices of the business, secured acquisitions adding value and exceptional new team members and products to the company, and progressed a whole host of brilliant collaborations and partnerships. All have allowed us to help organisations become more effective through the power of simply effective technology and digital transformation.

Digital Artisans

Our year was kicked off by CEO Tim Howarth outlining his vision for digital artisans as the future of work. Fimatix is home to a team of highly skilled experts who deliver agile, adaptable and practical digital solutions and products to support our clients’ business goals.

Planning Inspectorate Win

Early success came this year with a contract win at the Planning Inspectorate, an executive agency of the Department for Levelling Up, Housing and Communities. It was fantastic to see our unique partnership approach with Kin + Carta recognised, and together we’ve been making good progress in transforming a number of the Inspectorate’s end-to-end services, including appeals, applications and examinations management.

Idea Group Acquisition

In May, the Fimatix team continued to grow, with the acquisition of leading Financial Services technology specialist, Idea Group. Bringing on board the Idea Group team has been hugely valuable for us, as they have brought to Fimatix over 20 years of experience in providing industry-leading services to the investment management and pensions sectors, and a suite of unique governance and information interaction tools.

Isle of Wight Trip

The summer saw a company trip to the Isle of Wight, where 29 of us gathered from founders to new joiners, including the Idea Group team. It was great to get to know each other with discussions, briefings, sailing, racing and socialising all on the itinerary!

Expanded Private Sector Launch

This all set the stage for September, and the launch of our expanded private sector offering. Headed by the brilliant Sanjeev Dhiman, our private sector operation now provides an extensive, asset-backed service that is adding value across the financial, regulatory and operational sectors.

Blue Lights Conference

Our public sector team also attended the Oscar Krane Blue Lights Conference in September, speaking to police, ambulance and fire service teams on the power of successful digital transformation in delivering value-for-money and enhanced public services. It’s been a privilege working with the Home Office and UK Policing, and we’re looking forward to building on work such as our digitisation scheme and upgrades to the Police National Computer.

Corlytics Partnership

After the success of the private sector launch, we built on this momentum by partnering with regtech firm Corlytics in October. This partnership has built on a long and productive relationship with Corlytics, and now sees us integrating each other’s services to support change management across the financial services and insurance sectors.

IoD Fintech and Finance Group

One highlight of this year has been growing our network across different sectors and fields of expertise. As part of this, we’ve been delighted to sponsor the Institute of Directors’ Fintech and Finance Group as they foster collaboration and grow opportunities between the technology and finance sectors. The group will be holding events throughout next year, and it’d be fantastic to see some familiar and new faces at their next meetings.

Prodigy at the Fund Operator Summit

Rounding out November was the Fund Operator Summit, which marked an important opportunity to hear from industry about the challenges and opportunities they’re expecting to see in 2023. In particular, it was great to discuss how our Prodigy tool can help financial services institutions meet revised ‘greenwashing’ standards, by enabling governance oversight over the entire lifecycle of a product.

It’s been hard to pick out highlights from what’s been another exceptional year at Fimatix, filled with sector-leading work done by some inspirational people. We’d like to end 2022 by thanking everyone who’s worked for, with, and around us to make all this progress possible, and we can’t wait for 2023!

Over the past few years, the financial services sector has undergone a complex regulatory evolution. Even past the usual flow of regulation change and shifting reporting standards, there are two key trends we’ve identified at Fimatix that are driving this, and which put firms at risk of falling behind if not grappled with effectively.

In the first instance, is an ever-growing investor and regulatory demand for ESG-compliance. Throughout the entire lifecycle of a financial product or service, its environmental impact now requires assessing and where possible reducing. Any social benefits, meanwhile, need identifying and enhancing.

Next, upcoming changes to Consumer Duty regulations call for higher and clearer standards of consumer protection across financial services, with the aim of placing the consumer squarely at the centre of financial services offerings.

These are both necessary steps in ‘de-mystifying’ the financial services industry to the increasing numbers of new, and existing consumers – and are also key stepping stones to ensuring consumers have adequate information on which to base their financial decisions. In many cases though, they can require systemic change to do right, and for larger firms in particular, involve the gathering and processing of vast quantities of data.

This is where Fimatix are playing a key role supporting firms to meet demand from for ESG-compliant financial products with it’s sector leading Prodigy solution – a tool that enables users to collate data and apply process controls to get full governance insight, across the entire span of a product or service’s existence. Our approach on implementing Prodigy has seen us partner with global leaders, including the financial services giant Aon.

A key feature of our vision for Prodigy is to make it adaptable to add value across sectors and jurisdictions. We do this via a data template system, where a library of templates provides users with a toolkit to filter data as required to support their regulatory focuses.

This means we can operate with concurrent product design, build and management processes, each with their own specific data templates, to cover product ranges and jurisdictions. We can develop new templates where needed, for instance in assisting firms wishing to manage and evidence their adherence to new Consumer Duty rules.

The period of economic uncertainty we are living through doesn’t look like it’ll be over any time soon. Politics and society continue to be faced with increasingly polarised worldviews, where the upper hand can shift from one to another in a comparatively short space of time.

This inevitably filters through to the world of business, giving those who are able to act with confidence, agility and information the advantage. Prodigy is one tool we hope can have such an effect, helping to mobilise the financial services sector for clean and resilient growth.

As a growing, agile organisation, Fimatix are investing in assets and solutions that will help our clients transform their business. In a few short months, we’ve taken our expert core private sector offering and expanded it to be an extensive, asset-backed service helping key players in the financial services sector, like L&G and Aon, to navigate the changing regulatory landscape.

A key part of that transformation in financial services is to use technology to improve our customer and client experience by straight through processing and reducing the significant and growing costs of compliance.

This has been at the core of Fimatix since our early days supporting businesses like L&G, Lloyds Bank and the Big Exchange.

Our recently announced partnership with Corlytics and the acquisition of technology solutions provider, the Idea Group, will accelerate and improve the capabilities we can use to transform our clients.

Assets like Corlytics’ regulatory risk intelligence and our own Prodigy and Nova products can materially improve risk and compliance management for investment and pension firms.

Prodigy delivers cutting edge technology, backed by the Salesforce platform to support product governance compliance across Assessment of Value, ESG and consumer duty. Nova provides pension fund managers with plug and play STP for pension transfers across various platforms including SWIFT.

Through these changes and growth, Fimatix are well-equipped to effectively transform our clients’ businesses. By leveraging these products, our deep industry domain knowledge, and our agile ways of working we will be able to add further value across the financial services sector in the coming months.

‘Declare “victory” and move on’ is a pragmatic way to frame the closing of a long running project where the vision/ambition was ground-breaking but with the passage of time it has become clear that the project has become bogged down, it will not deliver the vision and so people want as positive way as possible to close it down and focus on something new.

With the 20th anniversary of the signing of the Agile Manifesto coming up on 13th February, I can’t shake the feeling that this is the time for the Agile movement to “declare victory and move on”.  

To my mind the Agile movement hasn’t and isn’t going to achieve the vision/ambition it has adopted, has become bogged down and has become increasingly hypocritical.  My case for this is:

• In common with many long lasting change programmes, we have had massive scope creep.   The Agile manifesto was focussed on “better ways of developing software”; we are now trying to re-engineer all organisations through “Business Agility” using the assumption that all businesses are technology businesses and the over-simplification that software development has all the answers.  
• Agile values and culture are being increasingly politicised.  While this may be a reflection on the noise generated in social media echo chambers more generally, the direction of travel seems to be heading towards a viewpoint that Agile is a progressive concept, raising barriers to adoption.  
• The industrial complexes that have built up around Scrum and SAFe training/consulting indicate we value “processes and tools” more than “individuals and interactions”.  The toxicity of some of the interactions in the “framework wars” has put lots of people off and again creates unnecessary barriers to adoption.

I could go on about other ways that we, as a movement, are undermining the manifesto.

However the key thing is to focus on the positives and here I think we can legitimately “declare victory”.

We have achieved the original mission “better ways of delivering software”.  

• The vast majority of software development is now done using Agile techniques.  
• Young people are being taught Agile methods at school, apprenticeship and university.

As to who the victors are I think it is clear that eXtreme Programming is the primary winner given that its practices such as continuous integration, refactoring, pair programming and test first are central to all other Agile software deliveries.  The majority of the other methodologies / frameworks incorporate XP concepts.  

It’s more difficult when calling out people, because of those that inevitably get left out while making important contributions, but the originators/early adopters of XP, Kent Beck, Ward Cunningham, Ron Jeffries and Martin Fowler have been unequivocally proved right.  It’s also worth calling out Jez Humble for Continuous Delivery and Dan North for Behaviour Driven Development, concepts developed out of XP which have become integral to modern software development.

I’m crystallising my thoughts about “what next” and will get these out over the next few weeks.