Ethix sets a new standard for responsible investment online

With real-time portfolio monitoring from IBM and TradeChannel

Published on 19-Apr-2012

Validated on 28 Oct 2013

"By adopting TradeseC, we’ve succeeded in dramatically improving our business efficiency, empowering our customers to make better use of the advice we provide, and increasing the level of transparency within our organisation." - Ulrika Hasselgren, Chief Executive Officer, Ethix

Customer:
Ethix

Industry:
Professional Services

Deployment country:
Sweden

Solution:
Information Integration, BA - Risk Analytics, Optimizing IT

IBM Business Partner:
TradeChannel

Overview

Founded in 1999 and headquartered in Stockholm, Sweden, Ethix SRI Advisors (Ethix) provides advice and tools to support responsible investment according to clients’ investment policies and international standards. With a team of 24 at locations including Copenhagen, London, Helsinki and Stockholm, Ethix helps over 100 institutional investors to integrate environmental, social, and governance factors into their investment process and decisions, with estimated assets under its advice exceeding €300 billion.

Business need:
Nordic-based sustainable and responsible investment advisor Ethix had grown into one of the leading providers of SRI research and advisory services. As its client base was growing, the company suffered an efficiency pain point when its manual process-oriented legacy system struggled to deliver company research in optimal time.

Solution:
Ethix engaged IBM® Business Partner TradeChannel to implement TradeseC, a web-based portfolio management solution built on IBM Collaboration Solutions software. TradeseC software connects Ethix to its clients via a firewall, through which the client’s portfolio positions can be securely transferred and automatically processed.

Benefits:
Increases Straight Through Processing (STP), boosting productivity by 50 percent. Decreases business risk with automated error checking of security ID numbers. Enables responsible investment online with real-time SRI portfolio monitoring.

Case Study

Founded in 1999 and headquartered in Stockholm, Sweden, Ethix SRI Advisors (Ethix) provides advice and tools to support responsible investment according to clients’ investment policies and international standards. With a team of 24 at locations including Copenhagen, London, Helsinki and Stockholm, Ethix helps over 100 institutional investors to integrate environmental, social, and governance factors into their investment process and decisions, with estimated assets under its advice exceeding €300 billion.

Staying agile in a competitive industry
Since its foundation in 1999, Ethix has been at the forefront of the emerging sustainable and responsible investment (SRI) industry. As the industry matured and the company’s client base grew, Ethix wanted a way to differentiate itself from competitors. As Ulrika Hasselgren, chief executive officer at Ethix, explains: “In the past, we were extremely reliant on manual processes to provide research and advice for our clients’ portfolios, but, as our client base was growing and client requirements grew more sophisticated, these processes were placing an increasingly heavy administrative burden on the company.

“We wanted to continue to ensure the highest level of client satisfaction, and that meant setting ourselves apart from other providers by delivering the same quality of research and advice faster.”

Ethix’s legacy process involved data mining and data matching, with analysts entering information on companies into a SQL database, which was then matched to client securities. Clients only sent Ethix an updated list of holdings on a bi-annual basis, which meant that information was quickly out of date, and handling the data generated a large amount of administrative work for both Ethix and its clients.

“It used to take a total of around four months to deliver a company analysis report,” says Ulrika Hasselgren. “This involved researching a company, discussing issues with company and stakeholders, producing a draft, and having it peer reviewed. The result of this process was a four to six page PDF report produced using Microsoft Word and Excel, which was available to download from a static client page on our website.

“As global connectivity continued to improve, four months became a longer and longer time for our clients to wait for company assessments. We knew we could deliver faster, and we knew we had to if we wanted to stay competitive.”

Ethix wanted a way to cut down its growing administrative workload and deliver timely insights to its clients. In order to achieve this goal, the company needed to streamline the way it communicated with its clients.

A professional STP solution
As part of a total IT system refresh, Ethix approached IBM Business Partner TradeChannel to request a solution that would facilitate the communication of clients’ portfolio positions. “We’d heard of our own clients talking about the TradeseC software, so we invited TradeChannel to give a presentation,” says Ulrika Hasselgren. “Their pitch was very impressive. We immediately recognised the potential of TradeseC to revolutionise our client communications process, and we were confident in their ability to deliver a cost-effective solution.”

Ethix engaged TradeChannel to implement TradeseC, a web-based portfolio data management solution built on IBM Collaboration Solutions software. Requiring only a web browser and an internet connection, TradeseC enables Ethix and its clients to encrypt and transmit sensitive portfolio data through TradeChannel’s secure firewall, dramatically reducing the amount of human input required in administrative tasks.

Mikkel Mördrup, chief executive officer at TradeChannel, comments, “We worked with the Ethix IT team to customise and install the software according to the unique requirements of their business. To tailor the solution to Ethix’s specific needs, we designed a new module called Position Upload, which seamlessly integrates users’ portfolio management systems with the Ethix position keeping system, facilitating full STP.”

Boosting productivity by 50 percent
In TradeseC, Ethix has found the secure, automated solution for the communication of client portfolio positions it needed to increase its business efficiency.

“In the past, administrative procedures at both ends caused time lags between provision of positions and portfolio monitoring reports,” says Ulrika Hasselgren. “With TradeseC, clients’ holdings can be constantly updated, which was a prerequisite for the online experience we wanted to provide. Whenever a client updates their portfolio in TradeseC, we see it in real time.

“Because the handling of client portfolios is now automatic, there’s also a reduced possibility of human error creeping into the process. A missing or corrupt security identifier would stop the process and TradeseC would issue an automatic warning. TradeseC also confirms receipt of all portfolio positions, so we can now provide our clients a fully transparent audit trail, which further reduces our business risk.”

While Ethix’s legacy system only offered clients a static online repository of manually produced PDF reports, Ethix has developed a client interface with a selection of user-friendly tools to visualise information relating to the companies in client portfolios.

“Today, our clients never have to wait for crucial insights into the quality of their investments,” says Ulrika Hasselgren. “They can choose to view the information whenever and however they want. For example, they can download a consolidated view of the portfolios, or drill down to individual companies that are of particular interest.”

By automating so many time-consuming administrative tasks, Ethix estimates that it has increased productivity by around 50 percent, improved transparency, and reduced business risk.

A vision for the future
Ethix is confident that TradeseC’s structured, efficient and secure method for handling large amounts of sensitive portfolio data will give it a competitive edge.

“The TradeChannel solution has enabled us to achieve the business goals we set at the outset of this project,” concludes Ulrika Hasselgren. “By adopting TradeseC, we’ve succeeded in dramatically improving our business efficiency, empowering our customers to make better use of the advice we provide, and increasing the level of transparency within our organisation. By leveraging the innate strengths of our new process, I have no doubt that we will continue to deliver unique and timely value to our clients in an increasingly competitive industry.”

About TradeChannel
TradeChannel AB is a software company with extensive experience and in-depth industry know-how. TradeChannel assists the financial community in the management and integration of external managed mandates. Amongst its clients are major pension and mutual funds, insurance companies and banks.

To learn more about products, services and solutions from TradeChannel, visit: www.tradechannel.se

About e-source
E-source is responsible investment online – powered by Ethix SRI Advisors. The e-source solution offers daily updates on the ethical status of investments, instant access to Ethix’s latest research displayed on a user-friendly timeline, and the ability to search, sort, filter and print portfolio information at any time.

Products and services used

IBM products and services that were used in this case study.

Software:
IBM Domino

Legal Information

© Copyright IBM Corporation 2012 IBM Svenska AB 164 92 STOCKHOLM Sweden Produced in Sweden April 2012 IBM, the IBM logo, ibm.com, Domino, and Lotus are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. A current list of other IBM trademarks is available on the Web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml. Other company, product or service names may be trademarks, or service marks of others. TradeseC is a product of TradeChannel AB. IBM and TradeChannel AB are separate companies and each is responsible for its own products. Neither IBM nor TradeChannel AB makes any warranties, express or implied, concerning the other’s products. References in this publication to IBM products, programs or services do not imply that IBM intends to make these available in all countries in which IBM operates. Any reference to an IBM product, program or service is not intended to imply that only IBM’s product, program or service may be used. Any functionally equivalent product, program or service may be used instead. All customer examples cited represent how some customers have used IBM products and the results they may have achieved. Actual environmental costs and performance characteristics will vary depending on individual customer configurations and conditions. IBM hardware products are manufactured from new parts, or new and used parts. In some cases, the hardware product may not be new and may have been previously installed. Regardless, IBM warranty terms apply. This publication is for general guidance only. Photographs may show design models.