ViaNova STP initiative still has ‘weak links’

The pensions technology provider said ViaNova - which allows schemes and fund managers to pass transaction requests, prices and confirmations between themselves electronically and was launched last year - was a great achievement but "there is more to straightthrough processing than that".

Altus product manager Ben Cocks said the current system still has issues that can be improved.

Cocks said: "Unless we deal with all of these you are left with weak links, and if you have weak links the risk is still there."

Altus conducted a survey into the use of STP by third party administrators and discovered much of the processing and auditing of investment instructions is still completed manually.

It also said errors in processing resulted in losses to the customer and fines, which are already costing some TPAs thousands of pounds per year.

More than three quarters (77pc) still rely on the fax to send investment instructions to fund managers, while 16pc send investment instructions by post. Only 3pc of respondents use the electronic messaging standard ViaNova for investment instructions.

Cocks noted also that the investment instruction approvals process is often lengthy and complex, involving approval - in most cases, by at least two people (83pc). A third of administrators also sometimes seek trustee approval, normally depending on

the transaction size.

Despite the clear need to address this problem and the availability of technologies to enable complete instruction STP, only one in five (20pc) of TPAs surveyed expected to automate the process within the next year and 60pc admitted they had no current plans to do so.

Cocks said: "It is quite clear from these results that TPAs face the risk of increasing financial losses as well as a rising administrative burden if they do not embrace STP."