Global regulation overhaul and local competition driving step change amongst Australian super funds
Apr 02, 2012
Sydney – Australian superannuation funds and other institutional investors face an unprecedented raft of global regulatory change which, combined with a highly competitive local market, is altering the way they do business – and the way they interact with members.
This was the key message delivered at a briefing today hosted by Mark Kelley, recently appointed Chief Executive Officer of J.P. Morgan Worldwide Securities Services (WSS) in Australia and New Zealand.
J.P. Morgan WSS is the dominant provider of custody and securities services to some of Australia’s largest superannuation funds. Mr. Kelley said the global bank was working overtime engaging with policy makers and regulators around the world to assess the impact of regulatory change and work with super funds as well as investment manager clients on ways to remain compliant.
“Australian super funds are changing the way they do business, and in many respects this is being driven by the needs of their members,” Mr. Kelley said. “We believe the industry is being driven by what we call the ‘3 Rs’: regulation, returns and risk – the three factors that keep our clients up at night.”
In response to the fast moving Australian superannuation and investment market environment, J.P. Morgan WSS today announced a dedicated $30 million investment in new product and technology solutions to help Australian super funds and other institutional investors better manage their businesses. The investment in Australia is in addition to the US$1.8bn spent on technology globally by WSS during 2009-2011 – investment from which clients around the world will benefit.
The staged roll-out of local enhancements has already begun and will continue through 2013 to deliver the full capabilities of J.P. Morgan’s Global Funds Servicing Platform to all Australian clients.
Mr. Kelley, who previously oversaw the American market for WSS out of New York, said Australia was a key priority for the WSS business.
“We’re investing significantly across our Australian franchise. As a global bank we recognise the importance of this dynamic and fast growing market. Australian clients are sophisticated and they want an increasingly broad array of services from across the bank – whether that be custody and securities services or access to global banking capabilities such as structured products, research capabilities or leveraging the intellectual property of our investment banking teams,” he said.
Paul Gladigau, Head of Technology, J.P. Morgan Worldwide Securities Services in Australia and New Zealand added, “Our primary focus is to continue to support and grow with our clients by providing innovative products that will help our clients improve returns, reduce cost, reduce risk and cope with the barrage of regulatory requirements coming their way.”
Global Funds Servicing Rollout
A key initiative will be a significant investment in J.P. Morgan’s existing accounting engine to substantially increase functionality and provide greater depth, breadth and precision of accounting data – the core ‘calculator’ for funds to keep track of their assets.
The changes will also involve the rollout of the global bank-wide securities master database as the central source of all securities data – known in the industry as the ‘golden record’.
Additional key focus will be around delivering a range of eSolutions capabilities for client reporting and data delivery, including online and mobile channels – leveraging the expanded data availability and precision within the core accounting and tax engines.
The group will deliver systems enhancements and new product initiatives that leverage the capabilities of the global J.P. Morgan business. Deliverables that have recently gone live with local funds include:
- a global investment performance engine and reporting interface, including mobile iPad reporting
- a global investment analytics and portfolio risk system
- a global Over the Counter (OTC) derivatives processing and valuation system
- a global reconciliations platform
- a global application for automated processing of managed funds transactions
“Australian clients are increasingly investing offshore, searching for returns in different markets and from different instruments and asset classes. Our focus is on streamlining access to global markets and ensuring clients can better manage their risk and reporting requirements – faster, more accurately, more easily, and more securely,” Mr. Kelley said.