Why digitise your structured product distribution?

Several recent regulations aim to push up disclosure standards in structured products, and issuers find it an ongoing challenge to respond. The rules include the UK’s new Consumer Duty principle and Europe’s revised Markets in Financial instruments Directive (Mifid II). Regulators will continue to raise expectations on due diligence and the exchange of the necessary data and MIbetween structured product manufacturers and their counterparties.

Product issuers need the agility to respond and comply with new regulations like these and staying aligned with emerging best practices. Digitisation and technology-driven shared services help them do this.

Benefits of digitisation

Digitising the due diligence and information exchange process for issuers and counterparties delivers several benefits. The first is compliance support. Digitisation enables issuers and distributors to evidence adoption of best practice across due diligence and information sharing with counterparties.

Another benefit is productivity. Digitisation frees capacity across your sales, operations, legal and compliance functions. It allows you to service more clients with the same headcount while meeting your operational and regulatory risk obligations.

Using a digital shared service can help you maximise costs savings. For example, using your own resources to gather Know Your Distributor (KYD), Know Your Customer (KYC), and Distribution Agreement (DA) information could cost you 50 times more than Delta Capita inSPire’s mutualised, digital shared service.

Benefits of working with a third party

It may not be financially viable to digitise processes unless companies work with a third party that can deliver the necessary capabilities on a mutualized cost basis with a multi-customer platform. A third party can efficiently and economically run digitised platform based services, automating the non-core tasks such as chasing, collating, and maintaining due diligence data and service standards, templates and output, so you don’t have to.

Another advantage is better service as the third-party provider becomes a single point of contact, working seamlessly with your desks to meet their needs quickly and efficiently. For example, your teams can self-serve using the digital platform or pick up the phone and speak to our team.

All these benefits help you accelerate new client onboarding, and meet periodic due diligence requirements without the interruption of approvals. Ultimately, this helps you build revenue and bottom line.

How inSPire can help

Delta Capita inSPire delivers proprietary technology for structured product issuers and intermediaries. Uniquely, we also offer services run by structured product experts.

InSPire’s mission is to drive industry wide efficiency and standardisation. Our digital platform provides a complete due diligence solution – a single platform for onboarding and refresh services, including KYD, KYC and DAs. InSPire’s KYD services include global due diligence and periodic reviews that are always up to date. Its KYC services feature on-demand access to counterparty KYC questionnaires, documentation, and case remediation services.

We also offer DA drafting, with playbook-driven negotiating support and signing. These run in parallel to the KYC and KYD processes. Our screening includes counterparty adverse news and regulatory screening, reporting and ongoing daily alerts.

InSPire’s platform also includes market research and analysis using our market insight and industry relationships. Our technology-driven shared services continually evolve and respond to regulatory changes in the industry. We provide a bundled shared service to help industry participants demonstrate compliance with regulatory obligations, plus customisation options to meet specific issuer requirements.

Contact us to learn more about Delta Capita’s Complete Due Diligence Solution for structured products or to arrange a demonstration of the inSPire platform.

More about Delta Capita

Delta Capita is a division of Prytek and a leading provider of global consulting, managed services and technology. We have a unique combination of technological innovation and experience in financial services, with a team of over 90 structured product specialists supporting global tier one issuers.

Delta Capita offers a comprehensive range of services to support structured product manufacturers across issuance processes, documentation automation, connectivity, governance, and post-trade lifecycle.

Leading structured product issuers use our team of experts and specialist technology to transform their business and achieve efficiency gains while building scalable processes. Delta Capita is at the forefront of responding to regulatory change and helping structured product issuers transform their business and efficiency levels to boost revenue and profits.

About the authors

Richard Archer runs inSPire’s KYD, KYC and DA services. Richard has over 15 years' experience in financial services, including structured product functions, governance, risk management, compliance and facilitating DAs between product providers and counterparties.

Oliver Perry is our Head of Due Diligence, responsible for the design, launch, and growth of the service. Before joining Delta Capita, he was an equity derivatives COO in Hong Kong and London, where his role included responsibility for transforming product approval and distribution governance frameworks.