Financial services, insurance, pharmaceutical, healthcare and other companies are grappling with the challenges presented by heightened government scrutiny. One key challenge is to ensure that critical compliance and marketing documents get to where they need to be on time and accurately. Automated publishing technology has become a critical tool to replace outdated manual publishing processes and address these concerns, particularly in the reporting and publishing of financial data for mutual fund companies. To shed some light on the topic, the Editor interviews Elizabeth Smith, Vice President of Automation Services at Data Communiqué, to explain the process.
Editor: Please tell our readers a bit about your background.
Smith: My background is in financial services. For the last 12 years I worked as a senior legal specialist within the Legal Departments of large mutual fund complexes. Primarily, I was responsible for managing the creation and filing of the mutual funds' registration statements with the SEC, and finally the publishing of the prospectuses and other compliance communications.
Editor: And now you work for Data Communiqué?
Smith: Yes, last spring I joined the team at Data Communiqué (DCI). It was a change in direction for me - moving from the client side to the service provider side - but it felt like the obvious next step in my career. I sought out DCI because they are leading the transformation away from the age-old processes that hinder the financial services industry. I felt compelled to spread the message of what we had accomplished as a client through automation with DCI.
Editor: What did you accomplish through automation?
Smith: By moving the prospectus disclosure into DCI's automated publishing solution, my company was able to streamline its work processes, reduce costs and improve accuracy and consistency of data. As a manager, I was continually pressed with shrinking budgets and increasing demands. It was apparent to me that the idea of automation was not a novelty, but rather an essential next step to the continued success of the Legal Department. Fortunately, my management was very progressive and in agreement with my assessment, so we contracted with DCI to automate the prospectus creation and publishing process.
Editor: Can companies benefit by automating the publishing process for other documents?
Smith: Document automation benefits clients whose documents: (1) share a significant amount of common language in a variety of documents; (2) require regular updating; and (3) have a regulatory component, such as government review, approval or filing. Mutual fund prospectuses and annual reports are two obvious examples. These documents require updating at least once a year and the majority of the disclosure is re-purposed within multiple funds in the mutual fund family. Fact sheets and other quarter-end marketing materials are also good candidates for automation, but there are many other documents that can also benefit from the process.
Editor: Highlight for me some of the key benefits of automation that drove you to become such an advocate in the industry.
Smith: Customization, control and sophistication. DCI's solution is not template-based. It is a dynamic system created on a series of business rules developed together with the DCI implementation team and the client. These rules allow for output that is exactly to the client's unique specifications. Disclosure from the content library and uploads of financial data are married together in a matter of minutes into a print, web and HTML-ready format.
Another key benefit is control. The system eliminates the need to work with printers to typeset documents, thus drastically reducing costs. Historically, I often found myself frustrated by the amount of time spent faxing or emailing edits to a printer, lengthy turn-around times, and excessive fees. However, with DCI's solution, I was able to go into the library, make an edit to a component, generate a proof and see my revision applied to a final document in less than five minutes. Additionally, the system is a password-protected, web-based application so I was able to access it from any computer with an Internet connection.
Finally, I found DCI's system to be more sophisticated than other programs regarding data uploads, because it had the capability to receive uploads in multiple formats. By receiving information directly from the source, the data - and therefore, integrity - of documents remained intact.
Editor: You said that you were able to streamline your process for updating prospectuses by using DCI's automated publishing solution. Could you explain some of the steps which were streamlined?
Smith: First, let me explain the complex model I previously worked within. The legal specialist circulated a draft of the prospectus to several groups who manually entered their data and returned their edits. The legal specialist updated the document and re-circulated it for review. Again, revisions were hand-marked or manually entered and returned to the legal specialist for consolidation and updating. This process continued for several rounds.
Once the document was nearly final, it was sent to the printer for typesetting. Key reviewers, such as outside auditors and legal counsel, provided their substantive review at that stage knowing the version was a more complete depiction of the final document. It then became a race against the SEC deadline to ensure all comments were addressed in time. Obviously, the costs, time constraints and error margin did not lend themselves to best practice.
Through automation, we were able to maintain control over our documents from start to finish, and with the benefit of receiving print-ready proofs at every stage. In addition, the process was collaborative; while the legal specialist focused on updating disclosures, accountants simultaneously sent data uploads to populate performance and expense information. A first distribution proof was assembled quickly and efficiently, which led to earlier review cycles and filings.
Additionally, a content management system based on shared disclosures removed what legal specialists call "future business and template review." Through this content management system, template changes were made once in the system and automatically rolled forward into each new prospectus.
Editor: Were you able to realize a reduction in errors by moving to an automated system?
Smith: Yes, we saw a significant reduction in supplements. The nature of the historic update process had a large margin of error and supplements were a regular occurrence; however, automation streamlined the process. Our reviews were completed earlier, were more thorough, and resulted in fewer supplements.
Also, other benefits were realized through automation. I was able to reallocate the work my staff was handling. By significantly reducing the administrative workload of the annual update process, I was able to unburden the legal specialists, thus allowing them to dedicate more time to disclosure and research. In addition, I was able to remove two legal specialists from the annual update process and reallocate them to the increasingly demanding projects of alternative investments.
Editor: What would you like our readers to take away from this discussion?
Smith: Automation helped us realize tremendous benefits that resulted in significant positive returns. It is hard to truly capture it all in one conversation. I hope that I have hit on some of the major points that others can relate to, and I encourage those individuals to contact me. I would be glad to spend some time with them to review their current processes and discuss alternatives through automation.
Elizabeth Smith is the Vice President of Automation Services for Data Communiqué International. As a principal contact in the Boston office, Mrs. Smith is an integral part of new business development and oversees account management for several prestigious financial services clients. She can be reached at (617) 449-0963.