Manual swap management still rife, says SimCorp
26 August 2015 New York
Image: Shutterstock
Many asset managers are still relying on manual processes for managing complex swaps across the investment lifecycle, according to a SimCorp survey conducted in a webinar.
Of the respondents, 44 percent they still use either ‘mostly’ or ‘entirely’ manual processes for swaps, while more than half said they still require some manual intervention in semi-automated processes.
As many as 55 percent also admitted to being unable to get a consolidated view of their derivatives exposures to compare with other asset classes.
According to SimCorp, the ability to view the composition of swaps is important for monitoring overall strategy and tracking which assets are owned, what they’re worth and the exposure across the entire book of business
Combined with a lack of automation, this can lead to poor investments, meaning investors may not get the best returns.
Marc Mallett, vice president of product and managed services at SimCorp North America, said: “The persistence of widespread operational inefficiency in this area of the swaps market is a red flag pointing to the potential for costly errors and substantial delays in time-to-market.”
He added: “Adopting a global platform with the ability to deal with complex swaps along with other financial instruments across multiple jurisdictions combats and often eliminates these issues by providing a complete picture.”
The survey included 57 individuals from 32 different buy-side firms in North America.
Of the respondents, 44 percent they still use either ‘mostly’ or ‘entirely’ manual processes for swaps, while more than half said they still require some manual intervention in semi-automated processes.
As many as 55 percent also admitted to being unable to get a consolidated view of their derivatives exposures to compare with other asset classes.
According to SimCorp, the ability to view the composition of swaps is important for monitoring overall strategy and tracking which assets are owned, what they’re worth and the exposure across the entire book of business
Combined with a lack of automation, this can lead to poor investments, meaning investors may not get the best returns.
Marc Mallett, vice president of product and managed services at SimCorp North America, said: “The persistence of widespread operational inefficiency in this area of the swaps market is a red flag pointing to the potential for costly errors and substantial delays in time-to-market.”
He added: “Adopting a global platform with the ability to deal with complex swaps along with other financial instruments across multiple jurisdictions combats and often eliminates these issues by providing a complete picture.”
The survey included 57 individuals from 32 different buy-side firms in North America.
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