Maitland Fund Services Enhances B2B Collaboration With iWay Software

Integration Solution Enables Straight-Through-Processing for Global Base of Institutional Clients

Maitland Fund Services, based in Cape Town, South Africa, provides administrative, asset management, and infrastructure solutions to institutional and alternative fund managers seeking to outsource non-core administrative functions to focus on more strategic core activities. 

Properly servicing clients requires Maitland to settle trades on 27 international markets within precisely stipulated time periods. To keep pace with other pioneering financial services firms, the company wanted to successfully implement an infrastructure that would facilitate straight-through-processing (STP) by electronically linking elements in the front-office (trading), the middle-office (risk management, confirmation, and allocations) and back-office (clearing, payments, and settlement), without having to manually re-key data.

Maitland deployed integration solutions from iWay Software, an Information Builders division, to create a comprehensive, flexible, and highly configurable IT platform that handles front-office trading, middle-office administration, and back-office accounting; seamlessly links the company’s own trading and settlement systems with those of its partners; and accommodates a wide variety of market practices so Maitland can add new clients quickly. 

According to Paul Ferreira, STP architect in Maitland’s Application Services division, the company owes its success, in part, to iWay Software. “Our main clients are institutional fund managers in charge of pension, investment, and hedge funds,” Ferreira explains. “They value Maitland for its unified technology platform, which permits them to process trades and electronic messages rapidly, and without human intervention, based on a single point of entry.”

The Road to iWay

Maitland previously used a batch-oriented process for these trading activities, which caused unnecessary delays. Settlement instructions had to be batched and commenced one or two days later, commonly known in the industry as T+1 or T+2 (referring to the number of business days from execution to settlement of a trade). They knew that STP would provide clients with tremendous benefits, including greatly shortened processing cycles (T+0), reduced settlement risk, and lower operating costs.

“The trade lifecycle begins with a negotiation between trader and broker,” explains Ferreira. “Once a trade is executed, a straight-through process ensures the accuracy of the trade and handles settlement on the exchange or at the depositories. The quicker the trade can be settled, the lower the risk to the client.”

To manage these business-to-business (B2B) exchanges, the Application Services division decided to purchase a middleware integration platform. It had to handle data, application, and external integration for Society for Worldwide Interbank Financial Telecommunication (SWIFT) message processing. SWIFT is an industry-owned cooperative, which provides messaging services to banks, broker-dealers, investment managers, and non-financial institutions involved in payments, treasuries, securities, and trade.

Maitland had already implemented iWay DataMigrator to manage bulk data transport activities with Oracle and Microsoft SQL Server databases. After doing some research, Ferreira and his team learned about the iWay Integration Solution for SWIFT, a set of software components that would allow Maitland’s developers to easily read, write, and enrich SWIFT transactions while shielding them from the complexities of the underlying computing environment.

With its SWIFT message library and parsing engine, the iWay solution formats complex SWIFT messages, which are then routed by leading application servers, message brokers, and queue managers. By combining these components with other iWay solutions, such as iWay Service Manager, Maitland Fund Services could easily manage complex workflows for STP scenarios.

“All we had to do was purchase the iWay Integration Solution for SWIFT, which includes the most current SWIFT libraries,” Ferreira explains. “The XML layer that comes with iWay Service Manager made this integration environment an obvious choice. As an added bonus, iWay supported both the UNIX and Windows platforms.”

The team compared the iWay solution to Microsoft BizTalk, several niche integration providers, and a custom solution. They selected iWay for its low cost-of-ownership, development productivity, and unified support for ETL, application-to-application, and B2B message processing.

The Maitland team used iWay Service Manager to build the STP platform. According to Ferreira, this robust iWay product includes a Transformation Workbench that makes it relatively simple to generate SWIFT messages as required by each market. It can dynamically format and transform SWIFT FIN messages into SOAP, WSDL, and XML for internal processing.

“We didn’t want to purchase new tools or embark on major development projects every time we had to address a new settlement situation,” says Ferreira. “iWay enabled us to orchestrate development rather than create interfaces from scratch, which is much less laborious.”

Rapid Returns for Developers

The Maitland team handled the bulk of the SWIFT development on their own, with occasional support from Information Builders and periodic training from Fujitsu. “Fujitsu was very responsive and the support from Information Builder’s technical team in New York was excellent,” says Ferreira. “They could easily connect to my desktop to troubleshoot and resolve any issues.”

iWay Software updates the SWIFT libraries every year, including new dictionaries, schemas, and translation templates for all of the SWIFT messages. “We use 36 different message types, so not having to update and re-code our processes to accommodate changes is a huge time saver,” says Ferreira. “We just upgrade our iWay platform with the new library.”

According to Ferreira, other settlement firms spend months making changes to prepare for these SWIFT standard changes. iWay can support new and old SWIFT standards concurrently. While Maitland’s competitors have to install and maintain separate solutions to support the variant standards, Maitland can run both iWay libraries simultaneously. “It takes us a week at most to update our iWay libraries,” he notes. “We are quicker to market with SWIFT changes and we have more flexibility in how we manage SWIFT messages and processes. iWay makes us more competitive in these fast-moving financial markets.”

For example, some of Maitland’s clients have adopted Exchange Traded Funds (ETFs), which require a high level of automation at a minimal cost. “The plug-and-play reusable services we have created with iWay Service Manager give us the flexibility to cater to a wide base of clients,” continues Ferreira. “New clients don’t require major custom development efforts with iWay, which is easier and less expensive than other integration tools I have encountered.”

According to Laurianne Stamer, product manager of BI and Integration Solutions at Fujitsu Technology Solutions, the iWay platform also helps Maitland avoid penalties that accrue in an STP environment when trades are instructed late or inaccurately. iWay’s SWIFT solution includes a built-in validation engine to ensure compliance with SWIFT standards. iWay also validates the SWIFT messages for SWIFTNet networking violations, alerting the user before the message is submitted to SWIFTNet.

“If you don’t have the correct information you are liable as the administrating party for penalties,” Stamer explains. “iWay’s flexible development and orchestration platform can package and deploy new services rapidly, which means Maitland can meet market requirements without errors and avoid expensive penalties.”

High Yield Technology Investment

It used to take the STP team between one and three months to add a new financial services client. Using iWay, it now only takes a few hours to add a new client and start trading immediately with guaranteed settlement. This is a decisive competitive advantage since time-to-market is very important to these companies. “Many firms can’t get the job done in time because of the heavy custom development required,” explains Ferreira. “For us it’s a simple configuration process.”

Before iWay started handling STP, Maitland supported 26 processes. Now they run between 150 and 200 processes. The overall trade volume has gone up substantially as well. Maitland Fund Services previously executed between 300 and 600 trades per day with the batch system. With iWay, the volume averages 2,000 to 3,000 trades per day and Maitland settles 40,000 trades per month. Maitland’s clients are continually devising new types of funds and trading strategies that require specialized trading, such as hedge, counselor-traded, and multi-manager funds, all of which require specialized trading. “We can now cope with these new requirements without major complications,” adds Ferreira. “iWay lets us take on new and client relationships easily and accommodate their complex trading requirements. I can’t imagine how other firms could respond to these needs without a solution like iWay.”

In addition to the iWay SWIFT trading platform, Maitland depends on iWay to perform large volume data extracts and handle other types of B2B integration. iWay also loads pricing data from various exchanges on to the STP platform so traders and fund managers always know the value of the instruments that they have purchased.

“Both our front-office and back-office systems require us to load large volumes of market data into the STP platform in specific formats,” explains Ferreira. “Our iWay integration environment makes it easy to automate data retrieval, transformation, and loading, as well as apply very complex rules to our front- and back-office solutions. More and more aspects of our business now rely on the iWay platform because it enables us to build these complex solutions very quickly.”