Over the course of the last several years, the transfer agency industry has devoted significant time and resources to meeting the requirements placed on itself, and on its clients, from the wave of new regulation aimed at increasing transparency and investor protection. At the heart of these developments has been the need for greater collection, management and analysis of data to enable more effective reporting.
Considerable investment has been made in both people and infrastructure in order to implement the required changes to provide accurate investor information, If this wealth of data on underlying investors held by asset servicing providers could be harnessed, extracted and packaged appropriately then there is a great deal of potential for informing fund managers on the profile of investors that are choosing their funds, and by extension, helping inform product development.
Moreover, this rise in data collection is occurring against a backdrop of increasing cross-border fund distribution, fuelled by asset managers aiming to maximise fund subscriptions in a context of competitive domestic markets and margin compression. The introduction of UCITS IV and the Alternative Investment Fund Manager Directive (AIFMD) has helped to energise cross-border distribution thanks to the benefits and simplification of fund pass-porting. But while the sources of potential fund sales may increase by country and investor classification, gaining an insight to fully appreciate individual and collective fund sales performance as well as market trends remains the Holy Grail.
A potentially large mine of data is trapped within transfer agency systems because the appropriate mechanisms have yet to be created to extract and deliver it in a meaningful and useful format. The transfer agency industry processes hundreds of millions of transactions globally every year, data which if correctly repurposed, could enable TA providers to support their clients in gaining the valuable insight into cross-border fund sales. Moreover, combining transactional data with macroeconomic trends, which asset managers require for their successful product development, transfer agents could begin to support the asset manager clients’ regulatory compliance and/or sales management with reporting as well as provide useful intelligence to help identify sales patterns, which could in turn enable the nurturing of marketing plans and inevitably help to increase returns.