Fixed-Income Trading Vendor Offers Back-Office Assistance

HAI Systems, a Jersey City, N.J.-based provider of fixed-income trading and settlement systems, has launched a new product called Journal Assistant, which it has rolled out at its first client site, Royal Bank of Canada.

Journal Assistant is a rules-based journal-entry front end that automates the entry and management of back-office data. The system streamlines brokerage accounting by allowing sales assistants, client accounting and operations personnel to directly record business activities such as client account adjustments to the back office "without having to know the esoteric language and rules" of back-office accounting, says Bob Caruso, president and CEO of HAI. Caruso is a founder of HAI, which was originally a consultancy called Harris Associates, Inc.

Caruso knows the operations processes well, as prior to Harris, he was in operations management at Prudential, as well as other brokerage firms. He explains that most of the employees at HAI have either accounting or operations backgrounds, which helps them to understand the needs of their clients.

Caruso insists that the need to help automate journal entries in the back office was great. Caruso says, "In the larger wirehouses or retail organizations they have literally 1,000 reps and assistants, whereby the nontrade aspect of the business is traditionally broadcast via fax or wire. It is then collected by the head-office clerical staff and formatted into what is really a very cryptic set of back-office journal entries and then submitted to key punchers," he says. Journal Assistant aims to automate this process. Caruso says the company has come up with a way to make each one of these steps an event that can be selected. The previous process might take 11-12 steps, while the new process takes about three field entries.

In addition, the system is set up so that only certain qualified people can have access to certain accounts, he explains. Or if some require approval by a compliance officer, they are kicked out of the system to get that approval.

Another benefit to the application is that it helps the company provide clean statements to their customers. Caruso notes that there is nothing worse for customer relations than giving customers statements with "reversal entries or cryptic descriptions." "If firms use this system, statements are relatively clean. The necessity to reverse a transaction becomes less and less of an issue." He explains that the automation removes the margin of human error. The system is now being rolled out to Royal Bank's 3500 reps, and HAI will begin to market it to other firms.