International Financial Data Services has its roots in mutual fund administration and is jointly owned by State Street and DST Systems. The technology company, headquartered in Essex, has a 20-year pedigree in fund administration in the UK managing some £600bn in mutual fund assets. In the UK platform space, IFDS currently provides technology to Cofunds and through its partnership with DST Bluedoor, the Australian technology firm owned by DST, it has replatformed St James Place and is re-platforming Old Mutual Wealth.
IFDS licences the Bluedoor technology and provides the administration expertise in this partnership. As a transfer agency, it is used to handling a global pool of clients through its call centres and messaging services. It prides itself on bringing rigour and high standards of service to the rather prosaic task of managing records. IFDS also seeks to utilise its experience of regulatory change in the mutual fund world to benefit it platform partners.
The advent of platforms drove a major shift away from funds being held on the main register. This caused IFDS to re-evaluate its business strategy. The RDR has driven further change. The end of the rebate model has caused the fund supermarkets to diversify, moving beyond pure mutual fund platforms.
IFDS’ partnership with Cofunds is arguably a hangover from the pre-RDR world. The underlying core engine is fundamentally a register engine for mutual funds – it cannot, for example, offer a cash account. FundsNetwork has chosen to use Bravura to upgrade its technology and Aegon will continue its partnership with GBST when it integrates the Cofunds platform. Old Mutual Wealth, however, has chosen IFDS Bluedoor and Project Oval is now well underway with a projected completion date of 2018.
IFDS tells us that it is focused on working with scale businesses: SJP has £65.5bn in client funds under management and Old Mutual Wealth has £38bn in assets under administration. It believes that the platforms with scale are better placed to succeed. Group executive David Moffat comments: “Every platform has its users that will die in a ditch to defend the platform. This is not going to sustain… This is a game about scale.”
But in the case of replatforming, scale undoubtedly brings complexity. For IFDS, the devil is in the data. IFDS is currently helping to migrate hundreds of thousands of customer records and millions of transactional records at the same time. A hugely sensitive and complex task, it is nevertheless a hurdle that must be overcome.
In order to manage this effectively, IFDS is sensibly phasing its migration projects through different wrappers. It is starting with General Investment Accounts and Isas. The intention is to move the project through into pensions and full drawdown capabilities, and then onto the less mainstream wrappers such as offshore bonds.
IFDS’ approach appears highly tailored to its clients. The challenge here is making these systems fit for purpose for clients beyond SJP and Old Mutual Wealth. In building technology for the needs of its partners, it has to be mindful that it is also meeting the needs of its future market. And IFDS makes it clear that it has ambitions beyond its current projects. David Moffat, tells us: “9/10ths of the focus is on getting current projects delivered….This is the first very large movement of platform data. We have started to prove that these records can be moved. We will have learnt where the cost drivers are and we will be thinking about ways of bringing these down.”
But IFDS’ focus on scale players means that its opportunities to win new business are concentrated with only a few players. Any replatforming project requires a close partnership between the technology provider and the client. And when things go wrong, as they inevitably do with any replatforming project, this relationship is stretched to the limit.
By working with scale players, IFDS is committing itself to the toughest IT transformation projects. However, by building its systems out first with Old Mutual Wealth and SJP, it is undoubtedly fine tuning its approach for future projects.
Miranda Seath is senior researcher at Platforum