Investment bank Colonial First State (CFS) has bolstered its fund management operations by adopting a straight-through processing (STP) solution which generates cash and stock reports four hours earlier than previously possible.
CFS general manager of IT, Tony Clasquin, said the STP solution, from e-business integration software provider Mercator, was essential for survival in a highly competitive global marketplace, and because of the Australian Stock Exchange's tightening of funds settlement requirements to trade-plus-one-day (T+1).
The solution lets the bank view its cash position four hours earlier than when using manual transaction processing performed by CFS' accountants.
CFS processes between 200 and 300 trades a day, peaking up to 1000 trades on some days and the bank said it was imperative for fund managers to keep up to date with their cash positions.
"STP [was] a way to automate the exchange of transaction information between disparate systems, and a route to faster, cheaper and more accurate operations," Clasquin said.
The solution has cut transaction processing time from 20 to five minutes, eliminated human data entry and reduced the number of trade failures, provided instant access to information, and reduced the cost of storing and accessing hard copy trade confirmation documents, he said.
CFS will use a complementary software solution, Gemini, to automatically match and verify incoming and outgoing trade for accuracy.
Clasquin said Mercator implemented phase one of the solution in less than five months and CFS is so confident of the STP solution's payback that the bank will implement a second phase. Stage two of the project will extend the scope of STP to include custodial cash and stock, internal system-to-system reconciliations, fixed interest, foreign exchange and derivatives and enhancements to support multiple back-office databases.