PAPERLESS PROSPECTUS AND STATEMENT EFFORT COULD YIELD $65 MILLION SAVINGS, RESEARCH SAYS

Posted April 17, 2008

BOSTON – Paperless initiatives for prospectus delivery, statements and on-demand customer correspondence, as detailed in a rule proposed by the Securities and Exchange Commission in November 2007, could save the securities industry more than $65 million annually in printing and postage costs, according to research from consultancy Aite Group LLC.

“Capital markets firms are understandably looking for a sub-12-month return on investment for current technology initiatives,” says Adam Honoré, Senior Analyst, Aite Group and co-author of the firm’s research, which surveyed 505 US industry professionals, including technology executives from more than 12 major capital markets firms, as well as leading vendors. “However, despite all of the angst associated with the current market, firms are missing an obvious opportunity to save money. Reducing paper reduces cost. It also rewards leaders with good public relations given the current environmental focus.”

Aite Group estimates current printing costs for prospectus and statement materials in the industry at $27 million, and postage costs at $73 million. The research estimates that printing costs could be reduced to $8 million and postage costs to $27 million.

“Regardless of where one falls in the climate change debate, capital markets sit in the enviable position of establishing a win-win relationship with environmentally friendly positions,” says James Kang, Research Associate, Aite Group, and co-author of the survey. “Other than the insurance, health-care and mortgage industries, few industries could benefit more than financial services from having less paper.”