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A-Team Insight Blogs

The Sibos Vendor Agenda: Fiserv’s Harries on All Things Swift and Securities

Ahead of next month’s Sibos conference in Hong Kong, A-Team Group speaks to exhibitors and attendees about what they’re expecting from Swift this year. Geoff Harries, vice president of product strategy at Fiserv, discusses the hot topics for the conference and how they relate to the vendor’s own agenda.

As previously noted by Reference Data Review earlier this year, Swift has put securities reference data issues back on the agenda for its annual conference, due to be held in Hong Kong between 14-17 September. Last year witnessed a focus on risk management and regulation but little about the detail of the securities business outside of the specific industry forum discussions. This year on the other hand, there will be discussions on issues including corporate actions automation and the European Central Bank’s planned reference data utility. A much more encouraging sight for those attending from the securities back office vendor community.

Fiserv is one of the 168 listed vendors that are due to participate in the exhibition space this year. Harries, who is a regular at the Swift conference, is confident that the discussions will be topical and reflective of the general trends within the market. “Since Sibos last year the securities, the market has been focused around the issues of counterparty exposure as well as settlement risk. As a response, regulation will be top of mind for all participants. The central counterparty model will come up in any discussion around derivatives processing as will the debate around standardisation of OTC products,” he predicts.

Harries reckons the drive for efficiency will also be a core theme for the conference discussions. “Outsourcing or offshoring has produced cost savings but done very little for operational efficiency because the work is still done manually. Asian firms will increase their use of Swift messaging and industry utilities like Omgeo to further standardise post-trade processing in the region to capture domestic as well as cross border flows and introduce efficiency gains,” he continues.

Fiserv is also focusing on expansion within the Asian region over the next couple of years, adds Harries. This regional push is being largely driven by the growth of the domestic securities services markets. “Most recently, we worked with the Singapore Exchange to develop SGX Prime, an automated pre-settlement matching service aimed at bringing participants much closer to STP. Our global tier one clients have also looked to us to extend their post-trade processing and corporate actions platforms to Asia,” he elaborates.

“Fiserv has been in APAC for over 20 years but it’s because of the growing appetite for operational efficiency that we recently strengthened our local presence with a dedicated APAC business development head, Tim Berrada. Having an executive on the ground with a great understanding of each market will help strengthen our existing relationships and develop new ties in the region,” he continues.

Standardisation is another area that Fiserv is also looking to drive in Asia: “We’re currently working with Omgeo in Japan to help broker migration onto the Central Trade Manager (CTM) platform. Through central matching, these brokers can expect better visibility, efficiency, exception management timeframes and support for multiple instrument classes.”

Although it has been a relatively quiet year from the vendor with regards to news about its corporate actions business, Harries assures that it has not fallen off the agenda. “Corporate actions automation continues to be part of the critical dialogue for the Swift community and is a key component of Fiserv’s solution offering to increase visibility and control of the corporate actions process,” he says. Perhaps they are storing up some client wins for announcement in the many Sibos dailies?

Unsurprisingly, the numbers for this year’s conference are down on last year. This is likely to be due to significant budget cutting going across the financial services sector as a whole and a result of its location this year. Sibos’ usually high contingent of European delegates may struggle to justify a full week out of the office on the other side of the world. According to figures from Swift as at 31 July, delegates registered so far comprise: 3,604 in total, with 574 from the Americas, 2,133 from EMEA and 897 from Asia Pacific. Delegate numbers from Asia seem surprisingly low at this point, but perhaps they will go up over the coming weeks.

However, Harries is confident that the delegates that are present, will be relevant to the vendor’s service offering and will benefit from the Sibos experience as a whole. “We expect Asian firms to attend because of the growth in the region’s financial services base and, of course, the convenient location. Many institutions should make the trip because of the new challenges raised by the market. For example, some firms’ corporate action notification volumes have jumped by up to 400%. Without improved levels of automation to handle these volumes such a substantial increase in activity would lead to additional losses, which simply can’t be absorbed in the current market climate. Firms should come to the show to find out from Swift and others in the industry how they can solve these operational issues,” he contends.

The vendor has tailored its offerings to the Asian flavour in order to increase its appeal in the region. “Asian institutions want to generate more business by improving client service. Many of our conversations will focus on how these institutions can drive operational efficiency, improve STP and deliver new products to market faster and service a global community,” Harries explains.

Away from the exhibition hall, Harries reckons people will be looking at how market participants in Asia can come together to reduce fragmentation between domestic markets. “Bringing these markets closer together will mean lower costs and more efficiency when it comes to doing cross border business,” he adds.

Some of the discussions will be similar to the discussions that go on at every Sibos, as many major initiatives like cross border fund distribution and corporate actions automation are global, says Harries.

As for Swift itself, Harries believes it should continue its current focus on standards and best practices for the next 12 months. The enforcement of market practice adoption should be an area of focus for Swift, he says. “Some markets, like cross border funds, have experienced standardisation on a global scale. Other areas, like corporate actions, are still dealing with multiple message formats, inconsistent standards and varying levels of uptake, depending on the region. Whilst naturally a lot of the agenda tends to focus on market infrastructure, firms should also consider their internal readiness and levels of operational efficiency,” he concludes.

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