Transfer Agency Disruptors

For some decades now, Transfer Agency (TA) operators have offered a service based on ageing legacy systems, end of life technology that fails to meet the needs of today’s integrated global environment.  Such systems tend to lack the versatility to provide processing solutions across multiple jurisdictions; their functionality is rarely comprehensive and users tend to rely upon spreadsheet workarounds to fill gaps.

TA has often been offered as part of a larger overall outsourcing and/or custody arrangement, with the TA element priced as a loss leader.  Custodian banks in particular are now increasingly looking for an integrated solution to offer their end clients, who themselves are looking to join the dots between their global market operations.  Needs have changed, along with the recognition that one size doesn’t fit all.

The TA solutions market has now been disrupted by both Custodians and FinTech entrants.  New offerings are digital and cloud-based, utilising AI and blockchain technologies.  Systems auto-reconcile with others and cope with regional differences in regulatory reporting.  Productivity is materially improved along with information flow.

So, how does this affect TA people?  The development phases of these kinds of systems require strong engineers/developers.  Alongside them are subject matter experts (SMEs) who can survive in a changing environment, input knowledge and test the developed product from a user perspective.  Next, a different kind of SME is required, one who is client facing and can manage roll outs.  A level of administration will be required from a servicing perspective, but it’s clear that systems will take on much of the heavy lifting once at the “business as usual” stage.

Changing times in the TA world; some will say not before time.