Korean fund administrator Shinhan Aitas, part of the Shinhan Financial Group, has selected SmartStream Technologies’ TLM Corporate Actions to feed corporate events into its client reports. Kees Middendorp, senior consultant, corporate actions, for SmartStream Asia Pacific, explains that the administrator, which provides outsourcing services to fund managers in the region, selected the solution as part of a drive to expedite the time to market of these services.
Middendorp explains: “Shinhan wanted to increase their competitive offering to clients by achieving better time to market, and putting in place a scalable, automated solution which would enable them to grow, both in volume and in the service offering they provide.”
The fund administrator provides its clients with net asset value calculations and reports across their portfolios and is implementing TLM Corporate Actions to feed corporate events into these accounts. As well as offering outsourced services, Shinhan also acts as the internal processing arm for its parent company, Shinhan Financial Group.
According to the vendor, greater levels of automation in the data cleansing and event creation process will minimise the risk of errors as a result of manual entry. Sangwoon Choi, CEO at Shinhan Aitas, comments: “As the largest fund administrator in Korea, Shinhan Aitas is focused on providing the most flexible and innovative services to our clients. The implementation of TLM Corporate Actions supports this commitment by automating our event processing and enabling us to provide more timely and accurate net asset value information to our clients across all of their portfolios.”
Middendorp says that although corporate actions deals are usually competitive in Asia Pacific, he reckons that SmartStream has built a strong reputation for delivering “quality” solutions across the region and that is why Shinhan selected TLM. “It was never apparent during our engagement if Aitas were looking at other vendors, as they had reached out to us initially. Aitas originally contacted us and, at the time, we were not actively pursuing any business over there,” he adds.
The vendor is not anticipating any major challenges with regards to the implementation process for Shinhan, says Middendorp. “However, dealing with the language differentials, both in terms of the project management and as a solution itself, has been taken into consideration. For example, we need to convert some Korean characters into English, which they have the capability to do. Education on how to use the system will also be needed but no more so than at any other new implementation,” he explains.
SmartStream is about to begin a workshop to build a project definition document, which will record each step in the project, he continues. Once this is agreed upon, the implementation and configuration will begin along the agreed timelines.
“This is the first client we have signed in the South Korean market. However, there are several other large financial institutions that are interested in the product, and have seen it by way of a demonstration,” says Middendorp. “The Korean market is expanding and many institutions are already very sophisticated, particularly on the retail side. You only need to look at the recent rankings with Korean banks making up seven of the top 25 banks across Asia, to see how the market is developing. Within Asia there is a large volume of cross border transactions and that volume is expanding.”
With that development come challenges around scaling operations efficiently, the cost per transaction, visibility into back office processing and increasing competition as they continue to look to grow within and beyond their home market, he explains.
Richard Cummings, Asia Pacific regional director at SmartStream, adds: “As the investment market grows in Korea, providing timely, accurate information to an increasing number of clients is going to be very important. Customer service and the delivery of ongoing service enhancements will be an important differentiator in an increasingly competitive market.”
Middendorp continues: “Automation benefits firms by replacing paper-based and manually intensive processes that introduce unnecessary risk and increase cost. Korean firms are aware of the need for greater efficiency – not just in corporate actions – and understand the benefits that automation through proven software such as SmartStream’s TLM can deliver.”
Although Middendorp feels the appetite for corporate actions processing to be increasing, he does not, as yet, see a threat from any other competitors in the market taking business away from SmartStream. “Once Aitas is successfully live, we will begin formal discussions with the other businesses, perhaps by holding group workshops or education sessions. We are not aware of any other dominant corporate actions vendors in the market,” he adds.
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