Coris Capital has become the fastest growing pension fund administrator in South Africa, and moved to third spot in its market, since implementing a core back-office system from MIP Holdings.
Coris recently concluded a deal with Sanlam in terms of which the insurance giant merged its retirement fund administration business with that of Coris.
As part of the transaction, Coris sold its Multi-Manager to Sanlam Multi-Manager Portfolios, and Sanlam now holds 50% of Coris's equity. Sanlam has projected repeat savings of over R50 million a year through the transaction.
The resulting joint venture has seen Coris increase its funds under administration and processing volumes by multiples, being done on its business process platform, largely supported by technology from MIP and based on Progress Software's database and 4GL. MIP is Progress's largest partner in South Africa, and one of its most successful worldwide.
The consequence for Coris is the ability to grow its business almost limitlessly, both in South Africa and elsewhere in the world, through a decentralised franchise approach.
Coris specialises in administrative services to its client base, which includes retirement fund administration, disability management, risk benefit administration and annuities and pensioner payroll administration.
"Sanlam's innovative approach in finding an optimal solution to retirement fund administration through a specialist administrator has created a win for all the parties involved, especially members of retirement funds," says Johan Potgieter, CEO of Coris. "What enabled this was our business model, which is based on a financial control process unique in the industry.
"We verify the integrity of the databases of funds under administration against three metrics, every day. By way of comparison, most other fund managers report on the status of their funds under administration once a month, or even quarterly. Our approach has yielded unprecedented transparency and given our clients the assurance of total integrity."
Coris began its strategic alliance with MIP in 2003. "They helped us build the technology to suit our business processes," says Potgieter. "Their flexibility, especially with regard to risk-based billing, formed a vital part of the bigger picture."
Each fund a separate business
Coris treats each fund under administration as a separate business. Each has its own balance sheet, a database of assets, a database of liabilities and a general ledger database. These three databases are balanced with each other on a daily basis, ensuring the integrity of the information concerned.
"Pension fund administration is front of mind for many people today, so a transparent approach is attractive," notes MIP CEO and chairman Richard Firth. "Most administrators provide employee benefit reporting on a monthly or quarterly basis. Coris provides this same reporting on a continuous basis. Given the high-profile nature of some of the business practices that have been exposed in this area of the market, such as bulking, clients today demand the highest level of transparency, which requires real-time reporting. This in turn has driven triangulated administration such as that developed by Coris."
MIP earned the nod from Coris as its system is entirely new, and as such not dependent on the traditional batch processes used to reconcile contribution income. Core to the offering was the general ledger MIP had built, creating the potential for an ERP suite for pension fund administrators and the broader financial services market.
The strategy as formulated by Coris and MIP was to drive volumes, which would boost efficiency and economies of scale, with Coris's business processes providing a competitive-edge.
"MIP's billings increase as our volumes grow, which means we reduce our costs up-front, and MIP benefits as we add more funds and more members, as billing is done on a per-member basis. MIP's approach suited us 100%," notes Potgieter. "We are not an IT business, and have no interest in employing our own technical IT development team. Rather, our business is based on innovation, and MIP has allowed us to have an IT infrastructure without building it and managing it ourselves."
Progress Software has also played a significant part in Coris's success, as it supported MIP's risk-based billing approach in being prepared to defer software licensing, and its technology has scaled seamlessly to accommodate the growth in processing requirements.
Coris's unique business processes made it attractive to Sanlam, which has added a significant number of retirement funds to those which Coris had been administering, taking Coris to its new position of number three in the market.
"I firmly believe we can take the number one position locally," adds Potgieter, "and become one of the world's leading administrators."
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