02:30 PM
It Costs More Than You Think
Two of the slowest areas of the retail brokerage industry to adopt process automation have been the direct business of mutual funds and annuities, according to new research from Boston-based Aite Group. The report asserts that direct business, also known as "check and application," still is driven by pen-and-paper processes. Further, there is a disconnect between the cost of doing business this way and senior management's perception of the operating cost.
According to the responses of 17 financial services COOs, Aite found that 41 percent believe the cost of a manual check and application transaction to be between $0 and $20. Aite estimates the actual cost per manual mutual fund transaction to be between $26 and $41, and the actual cost per manual annuities transaction to be between $59 and $80. The cost was determined by mapping the workflows for processing these transactions and using average national salary figures to arrive at an estimate. <<<