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Automation Adds Efficiency to Corporate Actions Processing, But is Not a Sole Solution

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Corporate actions processing is challenging, raises prospects of financial and reputational risk, and can be extremely time consuming. Getting it right is key to financial institutions and their clients, so how can these challenges be overcome? Is automation the solution or are there also more nuanced approaches that will help firms achieve not only accurate processing and operational efficiency, but also the potential to gain competitive advantage?

A recent A-Team Group webinar sponsored by SIX – How to gain operational efficiency in corporate actions processing – considered the challenges of corporate actions processing, solutions to help improve operational efficiency, and resulting operational and business benefits.

The webinar was moderated by Andrew Delaney, president and chief content officer at A-Team Group, and joined by Jonathan Waldinger, vice president and product owner of corporate actions at BNY Mellon; Lawrence Conover, vice president, asset servicing at Fidelity Investments; and Yogita Mehta, commercial product director, financial information at SIX.

Setting the scene

Setting the scene, three audience polls established that the majority of respondents process 20-50% of corporate actions manually; most use in-house solutions, with others using third-party software and a minority using Microsoft Excel; and that 44% use the internet to source corporate actions data for market deadlines on a monthly basis, 33% on an occasional basis, and 22% on a daily basis.

Handing over to the webinar speakers, Delaney questioned what current corporate actions processing looks like. The answers were definitive – a lot of manual processing, fragmentation around processing, no standardised or golden source copy of the data, the data is open to interpretation, multiple data sources add complexity, and duplicate processes are often found in silos across large organisations. Corporate actions processing is also a cost centre for the business.

Automation is key

Considering these limitations and the challenges identified in another audience poll question on corporate actions processing – including a shortfall in budget, lack of management buy-in, shortage of required skills and a reluctance to change – the speakers agreed on the importance of automation, while noting that there are often elements of corporate actions that cannot be automated.

“Given that human error is what it is, we should look to automate in every possible way, but it isn’t always that simple,” said a speaker. “Sometimes there are things that can’t be automated, or they are very complex to automate. You need to do a cost benefit analysis in terms of the time versus the spend, and so forth. But in my mind, taking the human element out of some of the processing and automating it is better for the client, and better for the firm.”

Approaches to automation

Looking at best practice approaches to achieving end-to-end or partial automation in pursuit of operational efficiency, a speaker said: “The first step is to define the problem, what is it that we’re trying to automate? Then we need to look at the methodology, are we going to have a waterfall project with months of gathering requirements, and then a long technology build? Or could it be more agile, an iterative progress over the course of a year, with sprints, and maybe every four or six weeks delivering something that shows incremental progress. I prefer the agile approach.”

Where only part of the process can be automated, a speaker pointed to the riskiest part of the process, noting: “The highest risk and highest benefit usually go hand in hand.” Another commented: “The partial automation path is about bringing as much automation and as little manual input as possible on the journey.” From a practical perspective and easing part of the process, SIX recently released an automated Corporate Action Calendar to track and process upcoming corporate action events cost effectively.

Technology and resources

Other technology options to improve operational efficiency include moving corporate actions data to the cloud to provide access to the same data set across the organisation and avoid different parts of the business using different data sets. Addressing firms’ use of the internet to gather data, machine learning could be used to fine tune data searches and AI to set system tolerance levels and reduce exceptions.

As well as technology, the speakers noted the need for a focus on staff. “Make sure you are building knowledge and skill sets across the team, it’s not just about data input anymore. Are you providing the right opportunities for your team to learn new technologies and add benefits? There are a lot of fresh mindsets out there that can offer improvement opportunities,” said a speaker.

Another added: “Operations heads are finding it increasingly difficult to hire good corporate actions professionals and retain the talent pool, but automation could help. Corporate actions professionals are the most unsung heroes in the financial industry, they carry a whole lot of risk, but they hardly ever get credit for it. If you can automate and make their day easier, that’s going to go a long way in a space where professionals are becoming a scarce commodity.”

Benefits of automation

The business benefits of automating corporate actions processing are significant and include the ability to meet ever shorter trade settlement times such as T+1, get complex events right, achieve speed to notification, and be able to monitor the impact of corporate actions on trading strategies. It also reduces risk and helps firms provide data and payments to customers more quickly.

From an operational standpoint, automation can vastly improve the efficiency of corporate actions processing, evaluate different data sources, confirm the detail of corporate actions, and highlight exceptions that may need to be managed manually. It also reduces the burden carried by corporate actions professionals and provides opportunities to build new skills.


Summing up the conversation, the speakers advised practitioners working on corporate actions automation to identify risk, build business cases to win budget, explore new technologies, develop skills – and work with the knowledge that complete end-to-end automation of corporate actions processing is, for the time being, out of reach for many financial institutions.

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