What is GAIA?
The Global Alternative Investment Automation (GAIA) initiative formally commenced in August 2014, following on from exploratory meetings earlier that year. The group aims to bring automation to the operational messaging flows within the global alternative investment industry. Today these processes are carried out using faxes, or other manual methods, which are inefficient and do not take advantage of today’s available technology.
What is GAIA's objective?
The objective of the GAIA project is to introduce a standard road map for the adoption of automated communications and processes in the alternative funds industry. We wish to replace the use of the fax and the manual re-keying of data with electronic mechanisms which will allow data to flow safely and reliably. Automation of these key processes will bring huge benefits to the industry not least in a massive reduction in operational risk and enhancement of customer service.
What has GAIA delivered?
GAIA has delivered a business driven standard for the automation of order processing and reporting across the global alternative funds industry. Removal of ambiguities and a clear vision of the benefits of automation have enabled a standard approach to be adopted; one that the whole industry can now use consistently. Importantly, GAIA has brought alternative funds order processing into the the global ISO 20022 standard, which has ensured that this approach now has formal industry recognition as the approved way forwards. The group has proved that alternative funds and mutual funds can be processed using a single set of electronic messages, and the new unified ISO 20022 order messages will be live in 2017. GAIA continues to deliver a forum for key industry players to share their views on how we achieve automation and to help the whole industry plan a more efficient future.
What is the value of GAIA and automation in general?
Automating operational workflows has become widely accepted across the financial services industry, and is normal practice in most sectors today. The alternative investment industry has often been viewed as too complex to be successfully automated, but the members of GAIA have proactively decided to attempt to meet this challenge. Automation brings a significant amount of risk reduction to the operational process, meaning that information can be exchanged more reliably, timeframes for the delivery of information are reduced, and the possibility to mis-interpret data is lessened. From an alternative fund management perspective this brings significant benefit in itself, provides a more transparent model which regulators tend to be more comfortable with, and also improves the amount of reporting (both transactional and statistical) that can be provided. Ultimately, this should also allow all parties to obtain tangible cost reductions, but clearly this needs to be offset against the initial cost of investment needed to create these improvements.