The complexity of securities is the greatest challenge facing custody and administration services in superannuation today, according to BNP Paribas Securities Services.
The complexity of securities is the greatest challenge facing custody and administration services in superannuation today, according to BNP Paribas Securities Services.
Speaking at a media luncheon earlier this week, BNP Paribas’ head of securities services for Australia and New Zealand, David Braga, said that while the increasing availability of data was a key consideration for Australia’s asset owners – such as superannuation funds and investment managers – there is now greater pressure on custody and fund administration to provide “round the clock services” with new expertise, systems, governance and processes.
“The cause is that the [super] funds and fund managers are going through a massive evolution of what they need to do. Their geographic reach and the types of assets they are investing in [are] significantly extending,” Braga said.
“The current phase of insourcing for asset owners in Australia has seen largely domestic assets taken in-house. The next phase will see asset owners with their own fund managers located and trading offshore.”
A report produced by BNP Paribas and the Economist Intelligence Unit in January this year found that the world’s leading pension funds, superannuation funds and insurance companies are reorganising their operations to help meet long-term commitments.
The report follows growing concerns raised by Australia’s asset owners over the costs of meeting government regulatory requirements and the need to update administration platforms to service new asset valuations.
Braga announced that BNP Paribas had responded by introducing a new product in Australia called Data Navigation Analysis which draws on a series of smart dashboards and data visualisation tools to help clients better manage their data.
“We are focusing on data visualisation tools and the ability to make all that information that we have consumable by our clients,” Braga said.
“It’s all good and well that we have [the data] but if we can’t expose it in a way that is consumable, it’s irrelevant.”
Braga, who also served as the Australian Custodial Services Association chair, said that one of the key trends we will see in the coming months will be that the types of services that are desired from asset servicing providers will extend with a greater shift towards the in-housing of asset management by super funds.
“The types of services that are desired from asset servicing providers has also extended and the regulation – the impacts of those services – is therefore wider than it’s ever been before,” Braga said.
“Asset owners will need services – custody, administration, trading, middle and back office services – based on a follow the sun model.”
