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Philippe
pp Chambadal
SmartStream Technologies - CEO
SmartStream at a glance
18 global offices, with development facilities located in the UK, Europe
and India
Leading software vendor focused on middle & back office operations
Successfully expanding its offering to capture an increasing portion of
the post-trade processing value chain, upstream and downstream of
reconciliations
Solutions and services to generate improved operational efficiency
and ROI
Serving 1,500 customers globally, including:
70 of the worlds top 100 banks
7 out of the 10 largest asset managers
8 out of the 10 largest global custodians
Reconciliations:
R
ili ti
real-time
l ti
reconciliation
ili ti with
ith automated
t
t d repair
i off
trade exceptions and failures caused by incorrect data, manual errors
or inconsistencies between systems and counterparties. This solution
is available on-premise, on-demand and as a Business Process
Outsourcing (BPO) service
Cash & Liquidity
q
y Management
g
(CLM):
(
) automated g
global, realtime management of all money movements, cash and liquidity
positions
Trade Process Management (TPM): co-ordinates and controls
the allocation, confirmation, clearing and settlement process whilst
applying a rich exceptions management capability
S
SmartStream
tSt
is
i the
th only
l vendor
d with
ith the
th ability
bilit tto lilink
k reference
f
d
data
t
management to reconciliations to further increase its customers STP
rates
Tower Group
Aspire
On-demand
On demand
On-premise
On premise
Treasury
Confirmations
TPM
Reference Data
Utility
Fees &
Invoicing
Utility
Trade
CLM
Reconciliation Finance
Exception &
s
Investigation
Corporate
Actions
Client
Money
Market complexity and the need to reduce costs are driving the need for shared,
standardised delivery of post-trade processing functions
Through the RDU, SmartStream is providing the first shared common source of
reference data to financial institutions worldwide, minimising trade breaks arising
from compatibility issues between customers
Matching
&&
Matching
Cleansing
Cleansing
Update data
A new collaborative Utility service to expedite the fees and invoicing process
between banks, brokers and inter-dealer brokers (IDB). The service is currently
being piloted for both OTC and exchange-traded instruments across all asset
classes
Beyond its SaaS on-demand offering, SmartStream has partnered to create the
industrys
industry
s first BPO service for reconciliations
reconciliations. The Aspire service provides the
hardware, software and staff to deliver a completely outsourced reconciliations
operation
Data
Anomalies
Data
Anomalies
Public
Public
data
data
Research
&
Data
Analysis
Manual fix
update
Provides
P
id a scalable
l bl approach
h to
t automating
t
ti reconciliations
ili ti
where
h
customers
t
are
rapidly on-boarded to a delivery model that adapts to their processing
requirements at a lower Total Cost of Ownership (TCO) than they could
achieve with an on-premise application
Aspire
Exception
raised
SmartStream is focused on serving financial institutions and currently has over 1,500 customers across the globe
The Companys customers are principally banks and other financial institutions, including more than 70 of the worlds 100 largest
banks, the top 10 largest asset managers and the top 10 largest custodians
Asset Managers
and Hedge
Funds
Custodians,
Fund
Administration
and Clearing
Houses
Corporates and
Insurance
Reduces
operational
risk
Reduces
regulatory
risk
Reduces
financial
risk
Reduces
reputational
risk
Reduces
operational
cost
Increases
revenue
CLM: automated
CLM
t
t d gl
global,
b l real-time
l ti
management
g
t off all
ll money
movements, cash and liquidity positions
TPM: co-ordinates and controls the allocation, confirmation,
clearing and settlement process whilst applying a rich exceptions
management capability
Corporate Actions processing: delivers a streamlined and
automated approach to complete, timely and accurate
event processing
Centralised RDU: provides a single and externalised approach to
data management,
management delivering automatic cleansing of vendor and
exchange data required to execute trades from front to back-office
Broker/
Dealers
Custodians
Stock Exchange
Custodians
1
Vendors
Reputation
Custodians
Risk
Client
Notifications
1
3
O
Operating
ti C
Costs
t
4
Custodians
Data Cleansing
Instruction
Election Capture
Clients
Entitlement
Calculation
5
Position Reconciliation
A
Account
t Posting
P ti
Back
Office
6
R
Reputation
i
Users
Back
Office
Operating Costs
Reduced
Risk
Reduced
Customer Service
Improved
Operating Costs
Reduced through the reduction of manual intervention and the
transformation of the process to exception management
Risk
Reduced, automated event creation eliminates the risk of missing
events
Customer Service
Improved through the freeing up of corporate action professionals
time
Operating Costs
Reduced
Risk
Reduced
Customer Service
Improved
Operating Costs
Reduced through the elimination of manual overhead of recording
and updating these dates
Risk
Reduced through the automated task and alert creation. Eliminates
the risk of missing key dates and deadlines
deadlines.
Customer Service
Improved through the freeing up of corporate action professionals
time and increased efficiencies
Operating Costs
Reduced
Risk
Reduced
Customer Service
Improved
Early warning alerts can help to resolve potential problems before they
escalate
Operating Costs
Reduced through the centralisation of all eligible balances and
transactions against the event master record
Risk
Reduced through the early resolution of reconciliation breaks
Customer Service
Improved through the enhanced messaging as clients buy into or
sell out of the stock affected by the corporate action
Operating Costs
Reduced
Risk
Reduced
Customer Service
Improved
Communication
Standard email, fax and letter templates can be adopted to impart any
information anytime
y
Operating Costs
Reduced through the elimination of manual processing
Risk
Reduced, clients will be informed instantly as soon as event
information is received or updated
Customer Service
Levels are improved through the automated communication
triggers
Enhanced features such as related holdings can be included on
event broadcasts
Early
E l notification
tifi ti off eventt ffacilitates
ilit t arbitrage
bit
ttrading
di
Operating Costs
Reduced
Risk
Reduced
Customer Service
Improved
Election management
Operating Costs
Reduced through the reduction of manual processing
Risk
Reduced via automated alerting where client elections are
outstanding
Automated reminders and chasers
Application of Standing Instruction
Customer Service
Levels are improved through extended deadlines
Enhanced messaging and confirmations though automated
communication triggers
Operating Costs
Reduced
Risk
Reduced
Customer Service
Improved
Operating Costs
g the reduction of manual p
processing
g
Reduced through
Risk
Eliminated via automated processing of entitlements
Customer Service
Enhanced with automated confirmation advices
Operating Costs
Reduced
Risk
Reduced
Customer Service
Improved
Reporting
Operating Costs
Reduced through the identification of poor performance
Risk
Reduced via trend analysis
Customer Service
Enhanced with increased information
Growth is predicted to be
largely driven by increased
spending on automation
software
WHY?
DTCC leadership
XBRL Initiatives
SEC Enforcement
Standardisation of the
Corporate Actions format in
North America and Asia
Pacific brought on by regularity
reform
f
should lead to spending
growth starting in 2012.
Automating the
corporate actions
workflow reduces
direct costs from
processing failures and
provides indirect
benefits to the frontoffice.
Specifically,
automating the
corporate actions
process provides
investment managers
with a richer
information window to
analyse data,
improving individual
productivity.
Inaccurate, inefficient event notifications and elections processing was the key
driver behind the project for a major investment bank.
Front office staff did not have access to accurate start of day cash and stock positions,
positions
and consequently experience a high rate of failed trades.
Custody operation consistently failed to win new business and lost existing clients,
clients
due to the lack of an automated corporate actions system.
Largest custody client, ceased using outsourced corporate actions service and brought it
in house using TLM Corporate Actions.
It does not make the press but there are still big losses against Corporate Action processing
Leading financial institutions have dropped appx 20mm over the last couple of years
Investment Banks benefit here, whereby injection of timely CoAc data into the trading arms of the
organisation is perceived as a competitive advantage
Hedge Funds where they deliver event notifications with details of Related Holdings to the trading
desks to ensure all event impacts & investment opportunities are researched
Measure to manage
SmartStream
Data Management Services
Business Unit of SmartStream Technologies, the leading software vendor focused on middle & back offices
operations
Data Management Services, based on our Universal Data Model, that provides high quality, consistent reference
data, pricing, corporate actions and indices services across all data types
Powering utility -like services leveraging shared people, content , IT infrastructure and processes
What we do
Services
Available
Target Clients
improve quality of reference data to meet clients compliance and new regulatory requirements
scalable solution, using consistent business rules across all data type
flexibility to provide various delivery mechanisms, protocols and formats clients required
subscription service allowing clients to pay only for the data they need, when they need it
Custodians
Exchanges
Corporations
Service Model
Operating Model
Vendor Mgmt
g
SLA
Customer Services
Acquisition
Operations
p
Mgmt
g
Reconciliation
Enrichment
Client Adaptation
Distribution
Data Management
Symbology
Financial
Global
G
Cross Referencing
Data Dictionary
Market Calendar
C
Enrichment
Validation
Manage receipt or
acquisition of data
sources
Categorise and
catalog data
Manage changes to
data formats
Rules based
reconciliation
Parse, interrogate
and normalise data
Raise exceptions
and notifications of
incomplete or
inaccurate data
Measure
consistency,
conformity and
competences
Measure and
manage service
levels
Identify data
completeness and
supplement where
needed
Distribution
Notify data
management team
of process, results
and vendor issues
Measure
effectiveness of
vendor data and
enrichment
Fields Level
Quality Control
Intra-Vendors
Recon
Business Rules
Corporate Actions
Applications
4-eyes
Clients Rules
Rules-based
composition
Support for delivery
mechanisms
Support for delivery
protocols and
formats
Measure and store
metrics for delivery
incl timings
incl.
timings, quantity
and composition
Data
Supplementation
Manual
Interventions
Data Extractions
from original
sources
Business
B i
R
Rules
l
4-eyes
Clients Specifications
Business Rules
Distribution Rules
4-eyes
Client Rules
Capture Announcement
Market level event data
Combining vendor, custodian and exchange feeds into a single cleansed data feed
delivered in any format
Use proprietary 5-tier Quality Control Processes to cleanse, refine, and enhance data
quality that is under-pined by measure and tangible SLAs
Because
Because the data matches between data sources do not mean the data is correct 2 bad data does
not equal good quality
Event Announcement
Ex Date
Record Date
Pay Date
----
----
----
----
----
Capture
p
Announcement
Market level event
data
Golden Record creation
Normalize,
o a e,
cleanse & enrich
data
Early notification
of validated event
master record
2
2.
3.
Determines the accuracy and completeness according to MDS and client-defined business rules
4.
Business Rules, Logical Verification, Threshold Calculation, Fields relational Validation, Holiday Rules, Weekend Rules,
Business Day, 4-eyes principle, Data Overwrite and Locking, Delta verifications
Data Supplementation
5. Clients Specifications
XBRL supported
Capability to store issue conditions, cash flows (distribution, redemption), mergers, acquisitions, legal
proceedings,
di
liliquidation/sale,
id ti / l capital
it l change
h
Service Information
Data cleansing
g and completeness
p
checking
g leading
g to event creation
Message Information
All standard ISO event types supported, additional non-standard event types supported
XML based ISO 20022 messaging is the way forward but with so many institutions just completing
ISO 15022 projects the speed of adoption will be interesting
OCR processing
Questions?