Calastone, the largest global funds network connecting financial institutions worldwide, is transforming fund settlement by streamlining the traditionally inefficient investment process.
Calastone’s digital network connects fund managers, wealth platforms, and custodians, eliminating manual workflows and enabling seamless, automated trades and payments with real-time payments a key enabler.
In Australia, Calastone are the largest provider of managed fund order routing and settlement services processing ~95% of wholesale managed fund trades, around AUD $132 billion in trade settlement messages per year.
The challenge: outdated processes increase errors, delays, and costs in trade settlement
Until recently, all investment payments by wealth platforms and custodians were made via legacy processes and system creating several issues:
- Payments being sent end of day and subject to cutoffs that, if missed, jeopardise receiving agreed fund unit pricing
- Payments not travelling in sync with order data creating reconciliation issues
- Payment execution uncertainty and delayed cash settlements.
These issues increased the likelihood of delayed settlements, reputational damage, and financial loss for investment firms and their clients.
Transparency, accuracy, and efficiency transforms the investment process
Calastone worked with ANZ to transition the investment process to real-time, allowing trades to be processed and confirmed in minutes with payment data matching the order data file.
Switching to real-time payments has made payments faster, more accurate, and easier to manage. It helps platforms, custodians, and fund managers support real people and their financial futures.
Marsha Lee, Managing Director Calastone AUNZ
Outcomes
With Calastone’s solution in place, all parts of the investment ecosystem gain:
Custodians and platforms
- Fully automated transactions reduce errors
- Real-time visibility and certainty of payment outcomes and greater control over payment flows
- Real-time cash settlement for orders provides certainty that funds have been transferred and eliminates the risk of delayed settlements
- Increased operational efficiency and reduced operational risk as a result of automating the trade to cash settlement process and removal of manual processes.
Fund managers
- Immediate receipt of investment funds and enable timely payment of redemptions for their end investors
- Instant and automated reconciliation of trades enabled by consistent trade and cash reference data populated in the payment message
- More efficient portfolio management and fewer reversals due to payment delays.
Investors
- Faster, more certain timing for investments and withdrawal of funds — especially important during critical life moments, such as buying a home or accessing superannuation during emergencies.
Our new whitepaper explores how Australian businesses are increasingly turning to real-time payments to improve cash flow, elevate customer experiences, and unlock new levels of productivity and innovation.
Follow us