DnB NOR Takes Action on Corporate Events

DnB NOR gives the back office a face-lift and takes control of their corporate actions process with SimCorp Dimension’s Corporate Action Manager. At the same time, DnB NOR reduces costs and achieves scalability.

To learn more about corporate actions at DnB NOR, Norway’s largest provider of mutual funds and discretionary asset management services, SimCorp went to Oslo to meet Yngve Andersen from DnB NOR Asset Management.

Choosing between vendors

Yngve Andersen is always on the lookout for the most efficient, flexible and transparent software solutions to meet new challenges, as when DnB NOR Asset Management decided to look for automation and STP in their corporate actions workflow. The Corporate Actions department was facing an increase in workload and costs due to duplicate information, various formats, interpretation mistakes, discrepancies between sources as well as difficulties in reflecting the information in their Portfolio Management System. “Also, we experience that two changes in the market place converge to make life difficult for asset managers: The one is a pull from customers to invest in ever more exotic markets, e.g. the BRIC countries, Far East and Latin America. The other is a tendency of companies to approve of increasingly complex corporate events. Having systems that helps us keep track of what is going on is therefore of increasing importance”, Yngve Andersen adds.

The preferred solution

The preferred solution to this challenge was to engage with a leading market vendor that already had a relationship with the Asset Management Firm. DnB NOR already uses SimCorp Dimension’s enterprise solution across most of their front, middle and back office investment management processes, so given the business partnership was already in place, and the static data and securities were already stored within the system, Yngve Andersen says it was logical to select SimCorp Dimension’s integrated STP solution.

Decisive features

The key element in making the decision, was to avoid complicated interfaces to external systems, and to eliminate reconciliation, cost of maintenance and risk of error from data transfer. “By embedding the Corporate Action Manager into our SimCorp Dimension solution, DnB NOR is replacing a wide range of costly manual processes with an automated STP flow that reduces risk without compromising scalability or flexibility to handle special events and adding new event types”, Yngve Andersen explains. Both are important to DnB NOR who is preparing for continued growth as well as increasing activity on emerging markets. Also, should errors occur, they will be tracked earlier in the process. “It is much more expensive to fix an error after it has occurred than preventing it from happening in the first place. That is one of the benefits we really expect from this new functionality”, Yngve Andersen elaborates.

Challenges

  • Increased workload, cost and risk
  • Emerging markets activities
  • More complex events


Solutions

  • Automating corporate actions processes through the integrated Corporate Action Manager


Benefits

  • Reduces costs from automated STP solution
  • Reduced maintenance of external interfaces
  • Redution of risk and workload
  • Increased scalablity

Valuable client involvement

He goes on to emphasis the importance of the close collaboration he experienced with SimCorp throughout the process. Yngve believes SimCorp’s ongoing commitment to client- wide involvement during both the development and implementation process is key. Yngve Andersen also stresses that, “The fact that SimCorp is involving more than one client during the development of new functionality ensures a more comprehensive product as a wider scope of present and future scenarios are taken into account”.

The implementation process

Yngve Andersen is keen to benefit from all the advantages of the SimCorp Dimension Corporate Actions Manager to be implemented during Spring and Summer 2008. In 2009, SimCorp will add more event types and enhance functionality. At the moment, DnB NOR is implementing a third party system for data capturing and cleansing to provide SimCorp Dimension’s Corporate Action Manager with a golden record. Meanwhile, Yngve Andersen is looking forward to being able to increase the number of securities and portfolios handled without having to increase back office staff.

The future

Yngve Andersen concludes our interview stating that “With SimCorp Dimension’s automated, scalable STP processing and improved audit trail, I have great expectations for DnB NOR Asset Management’s corporate actions processing during future increases in business volume and activity on emerging markets”. Yngve Andersen's future focus will be on pricing, corporate actions and static data. Also, he will put a great deal of effort into measuring STP rate in the corporate actions workflow.