Think Global, Act Local

Date: September 4, 2013

The nice part of StatPro’s global business is that we are constantly introduced to regional issues that affect our clients. 

While we strive to make our services compatible on the global stage, there are just too many nuances that appear in the local markets to offer a one size fits all approach. Thus, our services are dynamic, our infrastructure is flexible and our products are frequently updated with new features to help resolve local issues.

The added bonus is that resolving an issue for a client in say Mexico can also solve one for a client in another region, say Spain. In the consumer goods space, we always hear about how the McDonald’s Restaurant menu is designed to reflect the local palette of its consumers, i.e. beer at McDonald’s in Europe or a veggie Big Mac burger in India. This localization concept is no different in the software and services business. If a company wants to be successful on the global stage, appealing to local requirements or tastes is vital. In this post, I’ll discuss three things that we’ve built into our platform to help address these local issues. These are languages, open compliance and dual listed securities.

The first few months after we launched StatPro Revolution, the platform was only able to generate our beautiful looking reports in English. While it is true that English is the international language of commerce, the reality is that most global investors (retail and institutional) have a home country bias to their investing. So, it is important to be able to send a client or colleague a report in their native language. One of StatPro Revolution’s first clients had a significant book of business here in Canada, thus we were being pushed to offer the reports in French and English since bilingual reports is a regulatory requirement. Of course, as the technology stack on top of which the StatPro Revolution web presentation layer was built offered the ability to “localize” the wording in our reports, once we had the proper translations, it was easy to offer up new languages. In true StatPro style of being innovative, we went from English only to over 9 languages within a few releases. The languages are English (US and UK), Arabic, German, Spanish, French, Italian, Japanese, Korean, Polish, Swedish, Turkish, and two Chinese dialects.

My favorite anecdote to the importance of having these reports in multiple languages involves a client in Vancouver. This small hedge fund is trying to raise capital and has targeted Hong Kong as a source of funding. This client loves sending out teaser sheets to prospects which include Revolution reports in Chinese. This gives the prospect a sense that the Fund is sensitive to the local market, has enough sophistication to generate multi lingual reports and might just have enough Guanxi to do business with.

A new feature that is very, very important in StatPro Revolution is the new Compliance module, which was launched in the summer of 2013. While the first release of this tool is targeted to help our clients with funds that fall under the UCITS IV regulatory regime in Europe, StatPro has built this tool so that we can have other local regulatory rules in follow-on releases. Therefore, US clients who need to comply with FormPF or Dodd-Frank can advise StatPro that they would be interested in such a version. In Canada, the Investment Industry Regulatory Organization of Canada IIROC is also rolling out new rules for investment fund performance guidelines and will also be rolling out new rules for firms operating in Canada. Our platform is designed so that we can add on regional rules without having to start from scratch each time. A funny story that we learnt from one of our Fund Administration clients had to do with new regulations in Mexico that requires all ex-ante VAR to be calculated with a simulation that has 1000 periods of data. The statisticians amongst us will snicker as data usually doesn’t need this many periods to be significant but our tool with some additional work can feasibly be tuned to work with this requirement without having to do significant redesign. In fact, in StatPro Revolution, we recently changed our historical simulation model so that clients can choose to run ex-ante analysis only 365 periods instead of the usual 540 periods.

The last point that is cool with StatPro Revolution is that we can now handle dual listed securities. This is a big issue here in Canada since many of our larger companies will float shares on both the TMX and the NYSE. The tool now empowers funds to identify the exchange on which the security that they own trades on and thus take advantage of the fact that the security is properly assigned to its rightful exchange. The product management team here at StatPro commonly uses Coca Cola in our demo’s of this functionality as it is listed on 7 different exchanges. As we expect to see a continuation of fiscal policy in the major economies to focus on currency valuations, it is very important to capture the security on its proper exchange since we’ll continue to see huge volatility in foreign exchange rates. I should think that our clients who own Japanese securities will also be happy to see this feature in StatPro Revolution as the Abe policy of keeping the Yen weak to prop up exports continues to bolster the stock price of many Japanese companies.

Finally, StatPro’s global support teams are always eager to understand local issues affecting clients. The local teams can help our product managers understand the significance of the issue. Then our developers can leverage the powerful tech stack that Revolution has been built on to quickly, via our agile development scrums, to deliver a solution that all of our clients have the option to utilize. So, yes, the tag line of HSBC sums this up nicely i.e. Think Global, Act Local.

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