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The
system, which uses AI to remember when an asset manager has
already uploaded a specific document needed to open a custody
account, has been tested for the past six months and will now be
used by the bank with BlackRock and other asset mangers.
The companies believe the system will make new funds get to
market quicker by streamlining what is now a heavily manual
process involving reams of paperwork, spreadsheets and faxes.
"The custody side, historically, has been a bit of a sleepy very
traditional industry operating steadily and reliably with faxes
and spreadsheets," said Naveen TV, managing director, product
development in securities services at JPMorgan.
"Asset managers are starting to realize that the lack of
automation is causing issues, and is actually a missed
opportunity to be more efficient."
The partnership comes as large financial institutions
increasingly turn to tech-savvy startups to help them automate
and digitize some of their burdensome processes.
JPMorgan, which has $27.4 trillion of assets under custody, took
on over $1 trillion of BlackRock's assets in 2017. The bank has
securities services operations in 30 countries and a custodial
network in more than 95 markets.
"We are digitizing this whole pre-trade space," said Gabino
Roche, Saphyre's chief executive. "This becomes more important
in the post COVID-19 world."
In many cases, COVID-19 lockdowns have further slowed down the
process of setting up custody accounts, as a lot of the
documents required need to be printed and signed by multiple
parties, said JPMorgan's TV.
Many financial institutions do not allow printing of sensitive
documents at home and with most people working remotely
documents need to be sent to various locations to get
signatures, he said.
(Reporting by Anna Irrera; Editing by Mark Potter)
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