May 8, 2014

A recently completed research study by Cutter Associates found that operations professionals are optimistic for a renewed focus on corporate actions processing in the next few years. Citing manual processes and increased risk as driving factors, firms are changing practices and assessing systems solutions available to help improve automation around the corporate actions function.

“Using manual processes and the skills of existing staff is working for many firms. However, our member firms have recognized that automation could greatly improve their processes,” noted Cutter Associates’ Senior Research Analyst, Laura Jesson. “But it’s less about lowering costs and more about lowering risk.”

The amount of data associated with corporate actions that teams are handling from multiple sources makes the creation of a golden copy of the event details very challenging. Indeed, more than half of those member firms surveyed cited data management as a top challenge. And not only at the start of the process: getting accurate and timely data to the front office decision makers in a timely and effective manner is critical. As one manager pointed out, “We don’t want to expose the firm to the potential risks of trading on incomplete data.”

While investment firms recognize the need for improved processes, in both automation and data management, budgets remain tight. As Hugh Griffiths, Managing Director of Cutter Associates in London said, “Unfortunately, the changes may be smaller and slower than corporate actions teams hope for.”

Despite this, firms are exploring their options, and taking those first steps to address corporate actions challenges. Many vendor solutions are available, accommodating a wide array of differing needs – from full end-to-end solutions to those that provide focused functionality.

Cutter Research analysts assessed and provided recommendations on a number of corporate actions systems available in the market, scoring each across a broad range of product features and functionality. The full 145-page report of their findings is available for CutterResearch clients and will be presented at the upcoming Spring meetings in London, New York and Boston.

About Cutter Associates, LLC

Cutter Associates, LLC provides truly independent investment process expertise for the investment management community. Through three interrelated services, Cutter Associates provides investment management firms the knowledge and tools to ensure that their business technologies and processes are competitive. CutterResearch offers member firms detailed, actionable research to reduce risk, lower costs and keep up-to-date on systems and operational processes. CutterBenchmarking provides bespoke reports measuring firms’ investment processes by capabilities, risk and effectiveness through comparisons based on tried and tested capability models. CutterConsulting partners with firms to evaluate, select, and implement systems and to develop leading technology and operational strategies. Cutter Associates, headquartered in Rockland, MA, has subsidiaries in Canada and the UK.

Whether developing operational strategies that drive meaningful value, or evaluating, selecting, and implementing systems, Cutter is here to help.