Fees and Expense Management

SmartStream’s fees and expense management platform and services provide banks with a best-in-class in expense and revenue efficiency solution. This is central to banks’ execution cost management strategies, supporting the accounting and invoice control function for expense processing, and facilitating strategic management of fees through data-driven decision-making.

Near real time reporting on daily volumes and expense levels allows desks to maximise the impact of existing fee caps and volume tier discounts. The solution also provides transparent and granular-level data to regulators when orders are executed, ensuring a bank adheres to best execution. A multi-dimensional, division-level expense view delivers cost transparency across fee categories, enabling business and client profitability measurement.

TLM Fees and Expense Management supports:

• Variable expense reduction
• Business and client profitability
• Dynamic service pricing
• Automated accounting
• Operational efficiency

TLM Fees and Expense Management is supported by best-of-breed technology, as well as industry defined processing and calculation logic. It also benefits from a global operations team that runs standardised processes, incorporating provider and client defined service parameters. This blend of resources produces a level of service which allows firms to strategically manage their variable expenses. It does so by using an end-to-end automated process to include:

• A centralised repository to capture, control and support the maintenance of all fee structures, transactions and reference data necessary to augment and process variable expenses.
• A robust and highly scalable calculation engine to independently compute any complexity of variable expenses including discounts, caps/floors and tiers, in order to create an enriched, fully attributed and priced transaction record.
• The ability to independently capture, generate and verify invoices at transaction, line item or summary level. Automatically relieve accruals and book adjustments to the general ledger.
• An expense line control sub-ledger system which manages accounting for high volume, high value expenses through automated accrual generation, expense allocation and general ledger postings.
• The verification and authorisation of payment processing from invoices marked ‘good to pay’. Automate the generation of payment details and SWIFT instructions to manage direct debits and postings. Control the ageing of cases through the payment process.
• Business intelligence and reporting, facilitated through a global rate repository, holding historical expense data at the transactional and summary level.
• Standard reporting captures various cost and volume dimensions to support canned and ad hoc reports, facilitating expense analysis.

Variable expense reduction
Generate granular information necessary to populate vendor optimisation scenarios and to provide the expense transparency to influence behaviour. Trade flows can be directed to the best priced venues, pricing discounts can be fully realised and rebates for liquidity provision can be maximised. Brokerage agreements can also be enhanced through renegotiation of rates to extract the full benefit of volumes with assurance the agreements are accurately applied.

Assess business and client profitability
Tune business performance and achieve scalability through meaningful trade cost analysis. Validate and enrich erroneous and sparse information to make unstructured data usable. Assess revenue inflows in conjunction with fixed and variable costs at the trader, desk, business unit or client level to attain a true understanding of profitability and net contribution, activity impacts the bottom line.

Enable dynamic service pricing
Achieve competitive and sustainable rates against confirmed client activity for cost plus pricing. Offer these to customers or enter into complex pricing agreements that maximise financial benefits through volume tiers, enterprise discounts, incentive structures or rebates.

Automated accounting
Allow expense controllers to allocate fixed and variable costs to businesses that are internally calculated and automatically accrued against trading activity for each period based on actual service utilisation. Maintain a complete expense line sub-ledger to provide transparency, track adjustments, establish control and maintain auditable processes.

Operational efficiency
Apply best practices to fees processing and accounting control functions through centralised processing across all major asset classes, fee types and service providers. Achieve high productivity and improved controls while reducing the labour costs associated with customer billing, postings and adjustments, as well as invoice management, funds application and payments.