With a new year comes a fresh start, and 2017 will be a year of new challenges and opportunities. 2016 was indeed an eventful year for politics around the world, but it will be 2017 where we will truly start to feel the full effects of some of these changes. If, as the government has suggested, Article 50 is triggered early this year, we should gain some insight into what kind of Brexit (‘hard’ or ‘soft’) we will have and how this could potentially affect the funds industry. We should certainly see greater clarity around fund passporting, so that we, as an industry, can start preparing to make any necessary changes.
MiFID II is also on the horizon, and is now only a year away, so we should have final clarity on the rules by the end of Q2. Rob Swan, Head of Data Services, discusses some of the issues that fund managers and distributors are likely to face in the coming months in his latest article ‘MiFID II: The Clock is Ticking’. We have found that there is still a huge amount of work to be done. Some smaller firms, for example, have simply decided to just wait until the rules become clearer in the summer.
With Brexit also on the horizon, some are also allowing the initial uncertainties following the vote to disrupt planning and preparation. In a recent article ‘Brexit and MiFID II: What it means for financial services’ I discuss the need for the industry to continue working towards a solution. Fund managers need to set aside sufficient time, and some have started already. We have already had over 15 clients joining our Data Services solution.
With both Brexit and MiFID II now firmly in view, and all of the costs and risk that they might bring, the need to increase operational efficiency and reduce cost has become ever greater. One area of inefficiency is dividend event processing. Last year I spoke with a number of our key distributor clients, and many of them were experiencing issues caused by inefficient manual processes in this area. In 2017 we are going to be working with a number of our clients to develop a solution, and we will ensure that you are kept updated on progress.
Newer and smarter technology solutions such as this will be absolutely key to ensuring that the funds industry’s position can remain secure in the long term. In order to remain at the cutting edge of technology, the funds industry must ensure that its puts technology at its core. We recently released a new whitepaper – “The Accelerating power of technology: lessons for the future of fund distribution” – in this paper we highlight that the funds industry must embrace technology at every level of their organisations if they are to make effective strategic choices going forward.
At Calastone, embracing the latest technology is at our core. We are therefore continuously upgrading and expanding our technology to meet the needs of our expanding client base. We have already prepared, for example, for the upgrades to ISO20022 that are planned for November this year.
2017 will be the year in which the industry can take action to ensure that it is not left behind, whether that be through creating greater operational efficiency or ensuring that money spent on regulatory compliance can also deliver additional benefits.
I look forward to working with you over the next 12 months.
