Omgeo has this month launched new functionality for its settlement and account instruction (SSI) database that Bill Meenaghan, global product manager for the vendor’s Alert platform, claims has allowed one client to move from 24% to 100% data quality compliance within a matter of weeks. The SI Compliance Scan functionality is therefore aimed at helping the investment management community to improve the quality of its SSI data in order to reduce the number of failed trades and improve operational processes.
Meenaghan indicates that the development of the functionality is part of the vendor’s ongoing focus on reducing operational risk and improving SSI data quality. “As with all of our initiatives, SI Compliance Scan was developed in tandem with our global community of investment managers, broker-dealers and custodians to ensure the new functionality met their SI requirements. SI Compliance Scan has been well received by users,” he says.
In terms of the tangible benefits of the solution, the move from 24% compliance to 100% for one client is something that Meenaghan hopes the industry will take note of. He explains that overall compliance levels have improved significantly since the release of the functionality: “Before the functionality was released, 149 of our investment manager clients were fully compliant. Today, this has increased to 226 fully compliant investment management users and that number is continuing to rise. We also have 520 fully compliant broker-dealers leveraging the service.”
He contends that maintaining up to date settlement instruction data is a time consuming task for financial market participants and therefore outsourcing that task to Omgeo saves time and money. “The new Omgeo Alert SI Compliance Scan capabilities allow users to easily correct inaccuracies and ensure that all participants in a trade have accurate and compliant SI data. As a result, firms can now process their trades with more efficiency,” he says.
Meenaghan is also confident that there is substantial appetite for these services going forward. “Over the past two years, we have seen a significant change in market participants’ desire to further standardise and automate SI processes. Although some firms still use manual procedures – with instructions being sent via email or fax and entered by hand – the industry is overwhelmingly committed to making improvements in this area and we anticipate that the drive for automation in this area will continue to increase,” he elaborates.
As policy makers continue to focus on improving the quality of securities data, he reckons financial services firms will look for ways to remain compliant and reduce operational costs. “With SI Compliance Scan, Omgeo Alert programmatically enables users to measure their SI data quality and obtain one comprehensive view of their compliance with Securities Market Practice Group (SMPG) local market standards and community best practices worldwide,” he adds.
In the first week that SI Compliance Scan was launched, more than 2,500 updates were communicated to clients, according to the vendor. In addition, 77 users achieved 100% compliance, with nearly 60% of all Alert users reaching over 80% compliance. Meenaghan indicates that Omgeo is planning to build on these improvement rates as it partners with its community to reach 100% compliance.
SI Compliance Scan is also the third and final component of the Omgeo Alert “Markets & Validations” releases. On which note, Meenaghan says: “Omgeo will continue to provide clients with enhanced Omgeo Alert features and clear guidance on the market rules in order to improve data quality.” Unfortunately the vendor is not giving anything away with regards to what these potential future developments may be at this stage.
He concludes: “Market rules are constantly in flux and investment managers need automated methods of verifying compliance with these standards. We will continue to work with our community to identify future best practices and rules that promote the highest levels of SI data quality while ensuring that forthcoming releases of Omgeo Alert meet evolving industry needs.”
Given the increased competition that Omgeo is facing in the market from players such as Swift, this reticence to elaborate further on what this future functionality might involve is likely warranted.