John Brogden

The financial services industry must focus on innovation to drive productivity and economic growth, John Brogden, CEO of the Financial Services Council said yesterday. Speaking at the launch of the 14^th annual FSC-DST CEO Survey Mr Brogden said over the past three years the financial services industry has focused nearly one hundred per cent of its time and resources implementing processes to comply with new regulation.

“It is critical that the industry moves on from regulatory reform to focus on what it does best – providing new and innovative solutions and products to clients,” Mr Brogden said.

“As Australia’s largest industry, financial services has the tremendous opportunity to innovate for competitive advantage. Whether it’s developing a product for small investors saving for retirement through superannuation or a major superannuation fund looking to develop globally diversified products, Australia has the skills and resources to be a significant player on a global scale.”

“Growth through innovation will increase productivity and will have a flow on effect to the economy,” he said.

Rhys Octigan, Regional Head of Business Development for DST Global Solutions in Australia and New Zealand said: “The survey makes it clear that as financial service firms move beyond addressing mandatory regulatory requirements, the difference between the leaders and laggards of tomorrow will be their strategic versus tactical view of technology spend today.”

“Leading firms are already identifying new and strategic ways to leverage their investments in compliance to create innovative projects that will provide competitive differentiation in the future,” says Mr Octigan. “The right technology will provide these firms the ability to develop fast, effective ways to service customers and streamline front- and back-office processes.”

Mr Brogden added: “Innovation is important for the industry because financial services is a driver of innovation in the wider economy through the investments it makes.

He said financial services is unique in being almost entirely self-sufficient with little use of government-funded programs. “It is a funder of innovation through its relationships with universities and the investment it makes.”

This year, 50 of the FSC’s 73 member CEOs participated in the survey which captured their views on the issues and challenges their businesses are facing in Australia. The key industry-related message that emerges from the survey is that the sector is aware that it needs to restore trust and improve its long-term sustainability to meet the needs of clients though their working lives and into retirement. However, the sector is still affected by regulation fatigue as the FoFA, MySuper and SuperStream changes continue to be bedded down. The special topic explored in this year’s survey is innovation – both within in the financial services industry and the role the sector plays in supporting innovation.

Key Survey Findings

• 82%  say the use of client data will improve products, increase customer service and contribute to their strategic thinking
• 77% of CEOs think the financial services sector needs to do more to meet the needs of retirees
• 75% say innovation in their firm is mainly focused on finding ways to increase revenue
• 73% think technology is a key enabler to deliver innovative financial services products

Top Three

The post Financial services industry must move on from regulation − FSC-DST CEO Report appeared first on AdviserVoice.

DST further invests in automating fund accounting and tax processing capabilities for asset-backed and mortgage-backed securities in HiPortfolio®

Rhys Octigan

DST Global Solutions, a market-leading provider of DST Global Solutions for the investment management industry, says the latest data on total assets under custody for Australian investors highlight the need for asset managers and asset servicers to have scalable technology solutions in place that efficiently manage this huge and growing asset pool.

Data released this month show that total assets under custody for Australian investment firms rose 8.3% between June 30, 2013, and December 31, 2013, to $2.3 trillion. Of that total, $1.7 trillion were Australian assets (up 8.4% over the period) and $647 billion were international assets (up 7.4%).

Rhys Octigan, head of business development, Australia & New Zealand for DST Global Solutions, said, “As investor assets under custody climb higher, driven by rising asset values and superannuation inflows, custodians and investment administrators need to have the right technology solutions in place to process this huge pool of assets with speed, accuracy and reliability. True scalability cannot be achieved by simply throwing man hours at a problem, and consequently, technology that enables straight-through-processing of even the most complex asset classes is now seen as an essential component in winning new mandates and onboarding new clients.”

Processing over 70% of investment transactions in the Australian market, HiPortfolio, DST’s investment accounting and asset servicing solution, has over 18,000 man days of R&D invested annually to help investment management firms automate end-to-end processes, increase efficiency and reduce operational risk. The drivers are two-fold: to ensure investment accounting and administration technology supports new products and services from asset servicers; and to optimise investment operations.

The huge pool of assets in Australia create capacity challenges, so investors are diversifying by turning to more complex financial products and alternative investments to drive returns and, as a result, investment accounting and administration technology needs to adapt to be at the forefront of this shift. For example, as part of a five-year recommitment, DST recently helped one of Australia’s largest custodian banks to develop automated fund accounting and tax processing capabilities within HiPortfolio for asset-backed securities (ABS) and mortgage-backed securities (MBS), the first custodian in the market to launch this new service to institutional investors.

The new capabilities in HiPortfolio support a variety of domestic and international ABS and MBS, as well as compounding-interest and inflation-linked swaps, while complying with Australia’s complex tax requirements including Tax on Financial Arrangements (TOFA) calculations.  This helps significantly improve reporting abilities by the custodian to its clients and provides more transparency to better evaluate investment decisions.

“The demand for more sophisticated technology to meet regulatory and client requirements means it’s time for asset servicers to assess where upgrading or expanding their use of their IT system can achieve efficiencies to boost productivity and gain a competitive advantage to win new mandates and clients,” Mr Octigan said.

The post Surge in Australian investor assets to drive asset servicing technology investment appeared first on AdviserVoice.

Click on the image to view and download the complete FSC

Financial services can replace mining as the next major export industry for Australia, John Brogden, CEO of the Financial Services Council said today.

Speaking at the launch of the 13th annual FSC-DST CEO Survey Mr Brogden said this year’s report clearly shows that as the mining investment boom slows and the centre of global economic growth shifts to Asia, the Australian financial services industry is ready to take a greater role in Australia’s export growth.

“To do so, the financial services industry first needs to move on from domestic regulatory change to make the most of its potential as the largest sector in the Australian economy,” he said.

This year, 55 of the FSC’s 78 member CEOs participated in the survey which captured their views on the issues and challenges their businesses are facing in Australia. They were also asked about their experiences in the Asian region, their views on opportunities, and their knowledge of factors holding back further growth in exports.

“Critically, the report reveals that the industry’s CEOs see a role for government in promoting this expansion, but one that is a light-touch,” Mr Brogden said.

“The industry does not seek subsidies or protection, but sees a role for the Government in developing relationships, coordinating and branding the industry’s approach to Asia and in making our tax system competitive in the region.”

CEO’s in the survey said boosting Australian financial services to Asia can be achieved by exporting expertise and skills and ‘manufacturing’ products in Australia and using these to tap into the rapidly expanding savings pool of the broader region.

Rhys Octigan, Regional Head of Business Development – Australia and New Zealand for DST said: “There is no doubt that the world’s economic centre is gravitating towards Asia and exports to this region will become increasingly important for Australian companies looking to grow.

“However, when looking at exporting products or services to other markets, systems, processes, and infrastructure need to be embedded in the overall package to make it an attractive value proposition.”

The 13th FSC-DST CEO Survey indicated that CEOs believe technology plays a major role when considering strategic initiatives and in the delivery of new financial products.

Australian financial services firms can gain efficiencies by exporting their technology infrastructure to help expand their footprint in Asia, according to Mr Octigan. “Technology infrastructure provides the foundation for growth into Asia and into other global markets. Only by understanding the dynamics and the challenges that the industry faces will adequate solutions be developed and adopted, allowing the industry to grow from strength to strength,” Mr Octigan said.

Mr Brogden added: “Australia has a world leading financial system, robust governance and outstanding expertise. Integrating these strengths with good processes and systems will make Australia a very attractive prospect as an exporter of financial services.”

Click here to download the full report.

The post Financial Services can replace mining as Australia’s next major export industry: FSC-DST CEO Report appeared first on AdviserVoice.