Introduction
Incorporated in 2002, MMC are a New Zealand based provider of outsourced fund administration solutions for investment managers and investment product providers. With 26 clients and over NZ$27.9bn in funds under advice, they are based in Auckland and solely focus on the New Zealand market. MMC pride themselves on being truly ‘local’ because it means that they are able to interact directly with clients, while being highly knowledgeable of local regulations.
Some of MMC’s clients are the most well respected investment and wealth management organisations in New Zealand, including BT Funds Management (NZ) / Westpac Banking Corporation, BNZ Investment Services, Milford Asset Management and Suncorp NZ (Asteron and Vero).
The challenge: risk reduction
In order to meet the demands of their clients, MMC seek to use every opportunity to adopt efficiency, reduce cost and lower risk. Before joining the Calastone network, MMC faced a number of issues while sending orders. Nicola Tait, Client Services and Marketing Manager at MMC, said ‘In the past we would receive emails, with scanned attachments, and they would be manually processed and manually checked. Then after the transactions were priced, we would send data files by FTP to a mailing house and advices were sent either by email or post.’
Manually looking at this information and re-entering it introduces a number of risks, such as the replication of data which significantly increases the potential for error. In addition, there was no immediate visibility over what the status of these orders were.
Selecting Calastone: order routing (applications and redemptions)
MMC became aware of Calastone shortly after its entry into the Australian market, and they recognised the value of joining the network. For MMC good coverage was very important – ‘The more of our clients covered by the network the better. We had a look at what was overseas and saw there was a real gap in the New Zealand market. Having good coverage of clients was key in our decision-making process.’
MMC observed Calastone’s coverage grow in Australia until it became a market leader. Well ready to adopt the automation that Calastone provided, MMC welcomed their arrival into the New Zealand market.
Onboarding and key benefits
Commenting on the onboarding, Tait said ‘It stood out as a very positive experience. We felt that it was a very smooth and efficient process, and that there was great communication the whole way through.’ Tait continued by saying ‘During the go-live process there was hand-holding right throughout ensuring that everything could be addressed as it happened – this was fantastic.’
Through a single connection to the network, MMC have immediately benefited from straight-through processing, enabling operational efficiency while negating the risk and potential for errors associated with manual processes. Making the process electronic has also allowed real-time, full visibility of the orders, ensuring that they always know the status of the trades taking place.
Scalability has been the most important benefit that MMC have seen so far. This is because if they add new clients then they do not necessarily need to add additional staff to process orders. Calastone makes it easier to increase volumes without increasing headcount or costs.
The future
Calastone has been working closely with clients to develop Calastone Transfers for the Australian and New Zealand market. In both of these regions, asset transfers remain highly manual and subject to high operational cost.
Speaking on the future of MMC’s relationship with Calastone, Tait said ‘It would be great if, over time, Calastone’s services were expanded to cover the full range of transactions. Switches and transfers are still quite a large part of the transaction flow.’
