Solution Stories Overview

“I estimate that the automation we achieved by implementing First Rate Performance saves us between 300 and 400 hours a year. Now, we’re able to spend less time managing data changes and more time demonstrating the value of our investment process through accurate benchmark comparisons. And we’ve done it while maintaining current operational costs.” – Director of Performance Measurement, Large, Regional Trust Bank

Trust Bank Trusts First Rate Performance to Transform Benchmark Processing

Client Situation

The bank spent 25-30 hours early each month processing and making adjustments to specific account benchmarks. Because this was a time-consuming, manual process, these adjustments were made to only a small percentage of the bank’s accounts. Now, however, Trust Bank Solution Story Call-outthe bank was faced with the requirement to expand the process to all 20,000 of its accounts.

Client Challenges

Expanding the scope of this processing was particularly challenging, because other types of monthly processing had to be performed simultaneously, straining the bank’s resources severely. In addition, the existing process dictated that the bank’s back-office staff had to set up a new policy index and benchmark package for each individual account that changed investment objectives. As clients changed their investment strategies, the bank had to manually modify benchmark constituents and blend percentages to account for new weightings (on a per account, per month basis).

Reason for Challenges

The bank had the requirements to perform this processing for all of its clients, and was using a manual process that was inadequate even for serving only a small portion of its clients.

What the Client Wanted
  • A way of demonstrating how the tactical decisions of the bank’s managers created value, when compared to the return of a static, blended benchmark representing strategy.
  • A blended benchmark that represented each account’s current strategy and any previous strategies.
  • A benchmark that changed as the portfolio strategy changed. Bank managers wanted to be able to demonstrate value compared to the current strategy, but also to show value compared to all previous strategies employed over the lifetime of the account.
What First Rate Provided
  • First Rate Performance now tracks each account’s investment objective and associates each with a particular blend of benchmarks that are defined by the client.
  • When an account’s investment objective changes, First Rate automatically updates the account’s associated benchmark with the current benchmark constituents of the new objective.
  • Updates are date driven, so the benchmark membership for prior months still accurately reflects the objective at that time.
  • As a “secondary check,” First Rate provides the bank with a monthly report with a summary view that highlights each month’s objective changes and subsequent benchmark changes.
The Impact
  • The bank estimates that the automation provided by First Rate Performance saves them 300-400 hours per year.
  • They can spend less time managing data changes and more time demonstrating the value of their investment process through accurate benchmark comparisons.
  • Eliminating manual data entry has created a higher level of confidence in the accuracy of that data.
  • The bank now possesses a scalable process for handling its account base, which is growing at one percent per month.
  • The bank can now offer an enhanced reporting solution that includes corresponding investment policy information with the investment results. This attracts new customers and helps retain existing ones, without an increase in operational costs.