ViaNova Market Survey 2016
The ViaNova community is made up of fund managers, administrators and technology providers who are active in the corporate pensions space. The group was originally put together in order to bring greater automation to the operational messaging processes between firms in the UK market, but these benefits have now spread into use both in Ireland and Continental Europe.
As a representative group of the financial services industry, the ViaNova group was polled with its annual survey in September 2016 with a number of interesting results, which we are now happy to share with a broader audience. For more details on the ViaNova group itself, its aims, membership or output, please take a look at vianova.org.uk
1.“We are happy with the level of process automation in our company”
The first question focused on the traditional area of interest for this particular community and, not surprisingly, one of the aspects that is seen as the benchmark of success (or not) of initiatives such as ViaNova. Whilst the responses to this question were generally positive, there are wild fluctuations when we look at different communication flows.
On the positive side the results for order processing show a healthy response with 62% of respondents posting a “strong agree”, 31% posting an “agree”, whilst just 8% chose to “disagree” with the statement. So, as an opening score, 93% agreement seems to be a very positive situation. Given that 100% of the respondents answered this question, this can also be considered to be a very representative view of the current market position.
Recent conference discussions have shown mixed perceptions regarding the success, or not, of the automation of transfers, and the results of the survey reflect this. Importantly, 62% of respondents chose not to express an opinion, but of those that did 60% were a “disagree”, with 40% being either “agree” or “strongly agree”, which suggests that there is still significant work to be done.
Reporting messages faired somewhat better with, again, a large amount of respondents (46%) choosing to skip this question leaving 71% either an “agree” or a “strong agree”, whilst just 29% stated that they were a “disagree” with the above statement around current automation levels. So, it seems that where adoption of these messages has occurred, the results have been pretty positive.
Last, and most definitely least, was the response on account opening automation, which has always been a particularly tricky area across various types of fund instrument. 62% of respondents decided to skip this question, which again shows that this area has not been the focus of automation efforts for the majority of the market. Amongst those who did respond 60% were a “strongly disagree”, versus 40% were equally split between an “agree” or “strongly agree”.
2. “There are too many market practice groups and standards groups attempting to service our industry”
The response to this question evolved in a very interesting manner, at one stage being very firmly in the “agree” camp, but over time this became a more split decision. Our final numbers, which included the views of 100% of our survey respondents had 46% “disagree”, however with 38% an “agree” and 15% a “strongly agree” for a combined total of 53% it seems that there is a strong view that there are, indeed, too many organisations in this space.
3.“Are you aware of the UK FTS initiative (ftsi.org.uk)?”
Very pertinent, given the response to question number two, we were interested to see how much market awareness there was of the FTS initiative. The initiative has been created on the foundation stone that the industry needs, and has requested, it to be set-up. However, the response from this community, at least, suggests that a group of firms who have made very successful steps in the automation of their operational funds processes are somewhat unaware of the new initiative. A sizeable 38% had never heard of FTS, 23% had heard of it, 23% knew about it, but only 15% knew about it in great detail. With these results suggesting that 61% of the ViaNova community do not know what FTS consists of, it seems that more work needs to be done here too.
4.“Do you consider the UK FTS initiative to be ….”
With respondents now pointed towards the UK FTS website, it was interesting to compare their responses on questions two and three in light of this question. Again we saw a very substantial split of opinions across the community. 22% believed that the initiative is “Unhelpful”, an additional 11% thought it was “Not Valuable, whilst 44% consider it “Quite Valuable” and 22% “Extremely Valuable”. So, with 66% considering the FTS initiative to have some value, made up of a group where 61% had previously not known what it consisted of, it would appear that there would be benefit in that particular group spending more time explaining its objectives openly to a broader community. The situation is well summed up by one response; “Not sure, will Google it".
5.“What level of STP does your firm have today?”
As ever, the devil is probably in the detail here, not least given the responses that we saw to question one. However, even if we consider these figures to simply relate to orderflow, they paint a very encouraging picture regarding the success of ViaNova. We again saw a full complement of respondents answering, with 62% of firms having STP rates of greater than 80%. Just 8% of firms find themselves in the 60-80% bracket, whilst 23% of firms fall into the 40-60% bracket. At the lower end of the study we see 8% of firms still struggling with just 20-40% STP, but at least there were no respondents who placed themselves below this level. Perhaps it is fair to say that this shows that focus on this area is generally rewarded in the end, but that it does require a second surge of effort to get beyond the 60% and 80% marks.
6.“Where does process automation come on your firm’s to do list?”
The next question looked at where firms were seeing their priorities lie as, in the past it has often been claimed that operational efficiency struggled to catch the headlines internally, and often lost out on budgetary requests to “sexier” initiatives. However, it this year’s rather bullish results are to be believed, then the times are changing. We saw no less than 54% of respondents claiming that this is “Top priority”, with all 46% of the remaining firms answering that it is a “Middle priority”. If this response is, indeed, correct and to be believed then this should be reflected in efficiency rates improving at quite a pace over the next 12-24 months.
7.“What is the factor hampering the automation of your operational messaging processes?”
The following question links into the success rate of automation, but asks the question regarding what is the biggest roadblock that is preventing even better performance rates. One of the most interesting responses is the one that scores 0%, which is “Lack of budget”, and seems to suggest that, financially at least, there is some truth to the trend that we have seen on question 6. However, the run away winner, which echoes much of the current discussion in the market, is that 46% are struggling with “Counterparties unwilling to adopt ViaNova solutions over faxes”. Another 22% posted related factors into the “Other” category, which means the score is more likely close to 68%. Slightly frustratingly, then, this is not an issue of capability or budget, but instead is simply a mixture of lack of awareness and perhaps a degree of unwillingness to move away from tried and tested methods, however inefficient or expensive they might be. The industry will probably need to investigate whether either the carrot or the stick could be employed to improve this situation!
8.“Does your funds processing involve interaction with companies in the United States?”
Given that we have now seen ViaNova being adopted in Continental Europe and Ireland, the issue of cross border activities becomes more relevant. These questions were also asked in the post-Brexit vote uncertainty, so perhaps casts an interesting light on the activities and interactions of the ViaNova community. At this point in time, though, trans-Atlantic business is at very low levels with just 8% answering “Frequently”, 38% stating “Sometimes”, whilst the majority of 54% are “No”.
9. “Does your funds processing involve interaction with companies in EU countries?”
When we asked the same question, but this time concentrating on the European Union, the response demonstrated a far greater level of business, which naturally may be impacted by the implications of Brexit over time. 23% of firms responded “Very frequently”, with 38% stating “Frequently”, and another 8% of the vote specifying activities with Ireland, meaning that well over half of our community (69%) is involved in regular business with firms in the EU. Only 23% of the firms surveyed have no activity with the EU.
10.“What is your perception of the implications of Brexit?”
As a final question, we could not miss the opportunity to ask our respondents for their opinions of the implications of Brexit on their businesses. As we have seen, there are 69% regularly carrying out business with firms based in the EU, and comparably very little activity in other external directions, such as trans-Atlantic. So, it would probably be fair to assume that there will be impacts as a direct result of these events. Our poll showed that only 8% of the vote was “Negative”, whilst the majority perhaps sat on the fence with 77% stating “Neutral”, and an additional 15% see this as “Positive” or “Very Positive”. We will look forward to seeing what the true result will be!