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Small is less than $5 billion

So another day draws to a close, with the usual mixture of sessions and chats from how to get automation into the smaller securities houses to how to use social media in finance.

Funnily enough, the latter was in a small “Community” room hidden miles away from the conference floor which, by the time I found it, was full.

So, it was a return to the conference rooms to hear my old friend Tim Lind, Managing Director for Strategic Planning with Omgeo, chair a panel focused upon getting smaller investment institutions and asset managers – defined as those with $5 billion or less in assets under management – to get rid of their fax machines and connect to the network.

It does seem amazing to me that we are still talking about fax machines in investment markets, but there you go. On this panel were:

  • Jan Ellis Snitzer, Vice President, Loomis, Sayles & Company, L.P.
  • John Callegari, Managing Director, Bank of America Merrill Lynch
  • Gavin Little-Gill, Global Head of Asset Management Product Strategy, Linedata
  • Roger Harrold, Global Head, Direct Securities Services, Deutsche Bank

And various questions were thrown out such as:

Roger: “Why are we still using paper in 2010?”

Jan: “Sending a fax is cheap, and if it’s an autofax then it’s automated. The same with emailing a spreadsheet, it’s cheap and they think it’s automated. Putting together an MT message and formatting that is harder to think about.”

Jan: “Investment managers can be cheap in the back office. Not in the front office, but in the back office they can be cheap.”

Lind: “How soon will STP mean straight through processing instead of straight to printer.”

Roger: “Investment bankers are getting more and more innovative in creating different types of rights issues and making these more complex. Fee incentives are a way of managing issues, but we’ve had those for many years, and it has not really moved the needle much. It’s chicken and egg – do you accept the inefficiency and force the client to do something, or do you enable the client with a tool to at least get started with a link into the trading machinery. Even SWIFT Excel files. We bring them in and then get them into the machinery.”

Gavin: “Front office solutions providers know FIX, they don’t know SWIFT. So as we think that we have to work out how to get that knowledge upstream to help handle the downstream.”

Jan: “We see RFPs for new business which often ask if we’re on SWIFT, are you automated, what apps do you use etc. We don’t have the ability to ask back how set up are you however.”

John: “The best way to enhance margins is to drive automation.”

There was then some Q&A and, once concluded, it was time to get off, upwards and onwards to the last Long Now session, which was one of the better ones discussing legal and environmental implications for the next century.

More on that later, but I’m off to dinner now and then the Misys party begins … oh no, my liver is complaining but I have to bash it and bash it now!

 

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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  • Bottom line is that faxes are seriously cheap to send but expensive to receive. FinSwitch has spent 10 years trying to get this right in the South African market where only a handful of companies in the entire industry can be called anything other than “small” by your measure.
    Only way we could really get buy in was to make it as cheep as possible, get the industry bodies involved and then add value to the chain to reduce the risk in the process. This gives value to both parties, not just the receiver (fax already automated for sender).