DST Global Solutions has responded to customer demand for a corporate actions solution on its HiPortfolio investment accounting platform through an agreement with XSP that covers joint development of a HiPortfolio integrated corporate actions module that will be powered by XSP.
Initially, the solution will be made available in Australia and New Zealand where DST has a dominant market position. For XSP, which is strong in Europe and the US, the deal will support its move into new territories.
DST has more than 160 investment management customers around the world using the HiPortfolio platform and expects about 30% with the scale to warrant a best-of-breed installed corporate actions solution will be interested in adding the functionality to their platforms.
While DST and XSP do not have a deal covering other XSP products, Geoff Harries, global head of asset servicing at DST Global Solutions, suggests the company could reach an agreement for its smaller customers to use XSP’s recently introduced XSPrisa cloud service for corporate actions.
Harries says: “We have been talking to XSP for a couple of years, but the tipping point came when customers said they wanted a corporate actions solution. Many had been processing corporate actions manually, which was error prone. Using XSP to automate corporate actions processing is expected to reduce operational risk and improve operational efficiency.”
The tie-up was announced this week and DST hopes to sign its first contract for the corporate actions module soon. “In the investment accounting space DST is one of the first suppliers to work with a partner on corporate actions. Others have tried to build out a solution, but we decided that partnering was the way to go for a secure and robust solution,” says Harries. “DST will now be able to compete with other best-of-breed corporate actions providers, but our differentiator is in the provision of an integrated solution that will reduce the cost for customers. People shouldn’t underestimate the challenge of integrating corporate actions and investment accounting, and setting up flows between the applications.”
DST will offer all three areas of corporate actions functionality in the XSP v5 platform – data scrubbing and validation, notification and response processing, and entitlement processing – with customers able to license selected functionality as well as a solution geared to income or capital events, or both.
XSP v5 is compliant with the Swift ISO 15022 messaging standard that supports straight through processing and has reached critical mass in financial markets. But XSP also has Swift ISO 20022, which improves the detail of messaging, on its roadmap and is expected to make it available when market adoption makes it viable.
While the DST HiPortfolio platform includes a number of white labelled, embedded products from third-party vendors, Harries describes the company’s partnership with XSP as a more strategic move.