DST Systems: Supporting Investment Management for 40 Years
June 29, 2009
DST Systems Inc. this year celebrates 40 years of providing market-leading solutions to the mutual fund industry. In recognition of this milestone, Money Management Executive asked DST's senior leadership to identify ways in which investment management companies can maximize the value they deliver to their stakeholders by leveraging the strengths and resources of their service provider.
This special three-part series will look at how service providers help support investment management companies as they look to manage expenses, improve efficiencies, mitigate risks, distribute their products and ensure shareholder satisfaction. Part one of the series focuses on improving efficiencies and managing expenses.
Managing Efficiencies, Adding Value
As investment management companies develop strategies in response to dynamic markets and rapidly evolving product trends, they do so with continued awareness of an overarching goal: to deliver maximum value to their stakeholders. Shareowners, distributors, fund employees and fund directors all look to these investment management companies for results and solutions. Investment management companies, in turn, can look to their service provider to deliver technologies and services that help them maximize the value they bring to their stakeholders.
"All service providers deliver some level of value," said Bob Tritt, group vice president of mutual fund servicing at DST Systems. "But investment management companies can maximize that value-and pass it along to their stakeholders-by leveraging the core strengths of a service provider that collaborates to help them optimize efficiencies and manage expenses. A service provider should deliver scale and efficient processes, market-leading technology and a team of associates with extensive industry knowledge and experience."
Tritt believes that one of the most important ways that fund companies can realize value is to work with a vendor that delivers tightly integrated technology solutions. When fund companies don't have to struggle to make disparate systems "talk" to each other, or to reconcile reports from different databases, he said, they are in a better position to respond quickly and effectively to significant changes in the industry, whether those be driven by economics, regulations or market trends.
"Because all of DST's solutions are based on a single source code and integrated into our core recordkeeping platform, we can accommodate change quickly and efficiently on one primary system, rather than across a host of systems that have to be synchronized," he said.
This development approach also enables investment management companies to streamline their processes for implementing and testing enhancements. Once an enhancement is made to any element of DST's recordkeeping platform, TA2000, it is available to all clients on the platform. New functionality can, in essence, be "turned on" as needed to respond to changing business needs.
Integrated tools, such as web-based self-servicing and call center technologies, reduce costly investor servicing tasks. Further enhancing these efficiencies are business process management and other automation solutions that streamline workflow across channels and departments. DST's business process management platform, AWD, delivers the power to automate, monitor and improve mission-critical business processes.
"AWD provides our clients with a high level of consistency and control in their operations," said John Vaughn, vice president of DST Technologies, which delivers AWD to DST Systems' clients. "By matching a piece of work to the person best trained to handle it, AWD drives quality and productivity improvements with a direct impact on the bottom line."
An example of productivity improvements can be seen in DST's mail center, where AWD supports a mail solution that systematically classifies and indexes mail documents, streamlining hand-sorting of incoming mail. Mail is scanned, classified and routed into the work queue via AWD; items that are not recognized at the required confidence level are routed to appropriate staff for manual classification. Today, 87% of inbound mail is automatically classified and goes straight-through to the appropriate business area for processing. The other 13% is routed for exception handling, which is typically managed electronically in half the time as paper-based exception handling.
Clients can take advantage of this new mail classification service by outsourcing it fully to DST. Alternatively, clients may choose to maintain their own mail operations and send DST scanned images for classification, and DST will return the classified images to the clients' work queues.
Flexible Service Options
Taking advantage of a wide range of outsourcing options offered by their service provider is another way investment management companies can manage resources and deliver maximum value to their constituents. By focusing on their core competencies surrounding asset management-while their service provider focuses on its core competencies of transfer agency work and recordkeeping-investment management companies are better positioned to deliver results.