Automation has been sweeping across the financial industry for decades, bringing with it reduced workloads and greater efficiency. Yet one area stands out for its relative lack of automation: corporate action announcements.
Attendees at the recent Corporate Actions Change Maker Forum, The Future of Asset Servicing, heard about the benefits of and challenges to implementing greater automation in producing and disseminating corporate action announcements.
“We need to accelerate workflows and eliminate touch points to deliver the efficiency the industry needs,” commented Martin Lawrence, Chief Commercial Officer, Value Exchange. “The key is adopting standardized processes to minimize risk and avoid the cost and time needed to fix faulty data.”
While cost is a consideration, the real issue is the lack of standardization in how information should be formatted to allow automated processing. This creates inefficiency and increased costs.
“A huge portion of our work involves ‘curating’ the data we get from issuers and their agents,” explained Matthew Schill, DTCC Executive Director, Asset Servicing, adding that the DTCC processes some 3.5 million corporate action announcements per year.
We receive announcement data in many different formats,” says Schill. “Even though we receive event announcements digitally, many of the complex events still needs human intervention because the information is not standardized upstream at the issuer-level.”
Value Exchange says that 66% of its members acknowledge that standardized corporate event data would deliver significant cost savings and reduce errors, yet many upstream issuers continue to rely on manual processes and/or submit information in inconsistent formats.
That’s why DTCC has been working for more than a decade to promote data standards for corporate actions, including developing tools to enter information in a consistent format that can be systematically processed into standardized formats for dissemination directly to market participants.
“The investor community has been asking for cleaner, standardized, upstream data for years,” notes Schill. “But there is no industry consensus on how or even from whom we should receive this information.”
The latest effort in the drive to standardized event data is AnnounceDirect, to be launched in 2026. Through AnnounceDirect, DTCC will lead industry modernization by standardizing the corporate action announcement process at the time of the event sourcing. Once live, the AnnounceDirect service will source announcement data directly from issuers and their agents. All issuers, agents and third-party stakeholders will be able to use AnnounceDirect to distribute announcement data directly to market participants.
Scalability is another challenge. Firms that still rely on manual processes are realizing the problems this creates and are looking to reactively automate these processes. For companies looking to automate manual processes, DTCC not only has many resources to help, but Schill can also offer some direct advice for preparing to modernize your processes.
“Before you implement any major change, identify your stakeholders and processes thoroughly,” says Schill. “This means talking to the person actually doing the job, even if it means sitting with them to see how the process works in real life. Also, don’t forget about the voice of the client either! You need to ensure you capture all the data you need for an effective automation effort.”