ADP 1999 Annual Report Download - page 14

mutual funds and the insurance industry. We believe this acquisition
will help us significantly increase our market share in this important
and growing market segment.
The Internet
Many of the largest on-line trading firms already use ADP Brokerage
Services to process trades and provide their customers with real-time
order entry and account inquiry services.
This year, ADP and Qwest
Communications International Inc.,
which offers broadband Internet-based
communications services, started
working together to develop and
market an end-to-end, single-source
Internet solution. This alliance will
help our clients gain fast entry into
the on-line brokerage market, and
enhance the capabilities of those
clients who already offer on-line services.
We also introduced Web-based products, such as electronic delivery
of trade confirmations and statements, and a mutual funds sales tool,
where users can view current fund information. Our clients can now
order a prospectus on-line for immediate delivery to an investor.
Straight-through Processing
Increasingly, banks and brokerages are placing a heightened
emphasis on outsourcing systems and applications to service
providers who can integrate them into efficient processing streams.
This “straight-through processing” improves work flow, reduces
operating costs and mitigates operational risks.
ADP’s ability to provide integrated processing gives incremental
value to our product set and is a strategic market advantage. By
integrating products that serve the financial services industry, clients
that might have had us process a single application now have a
viable reason to outsource multiple applications to us that are critical
to their businesses.
This year, for example, Discover Brokerage Direct, Inc. (DBD), a
market leader in on-line investment services, selected ADP to support
its electronic discount brokerage business. In addition to trade
and order processing, DBD is utilizing ADP’s proxy, optical storage,
and prospectus fulfillment services. This comprehensive arrange-
ment includes printing and mailing services for trade confirmations,
customer statements, and tax documents for DBD’s customers.
DP Brokerage Services is a
leading provider of transaction processing, broker
desktop productivity applications, and investor
communication services to the financial services
industry.
We serve a diverse client base, including full-service and discount
brokerage firms, global banks, and Internet brokerage companies,
as well as corporations, mutual funds, institutional investors, trading
firms, and other providers of financial services.
In ’99, Brokerage Services processed a significant portion of all
U.S. and Canadian retail equity transactions, with combined daily
volumes of 827,000 trades per day — clearly making us the largest
provider of transaction processing in North America. ADP Investor
Communication Services (ICS) also completed another proxy
season with extremely high-quality performance levels and client
retention rates.
ICS offers industry-leading data processing, computerized proxy
vote tabulation, printing, mailing, and literature fulfillment services.
It serves more than 14,000 publicly-traded companies and 450
mutual fund families on behalf of more than 800 brokerage firms
and banks.
This year, we processed over 450 million shareholder mailings
and tabulated over 50 million ballots representing more than
330 billion shares. A year ago, we introduced proxy voting and
the delivery of shareowner
communications over the
Internet. Currently, 60% of
all shares are voted over the
telephone, the Internet, or
via ProxyEdge®, our PC-based
electronic voting and record
keeping product.
The mailing of pre- and
post-sale literature to support our clients’ needs has become a strategic
growth area for ICS.
Since entering the pre-sale fulfillment business less than two
years ago, we have experienced a 40% increase in processing volumes.
Pre-sale literature fulfillment includes collation and kit assembly,
order entry, distribution, inventory management, and “just-in-time”
delivery of prospectuses.
This year, we also distributed more than 10 million prospectuses to
meet the post-sale customer compliance requirements of our clients.
In March 1999, we acquired Management Information Services
Corp., a well-known provider of shareowner communications to
A