Magazine Issues » October 2018

CUSTODY: Directory of custodians 2018

ShellThe Funds Europe directory of custodians that took part in our survey - and the Q&As with executives - strongly reflect the high level of investment and time spent on technology projects.

BNP PARIBAS SECURITIES SERVICES
Arnaud Claudon – head of asset managers

Blockchain continues to be the most talked-about area of new technology within the asset servicing business. How far away are you from using DLT in any part of your custody or related businesses in relation to record-keeping for your asset manager clients?
We are making good progress with the development of PlanetFunds, our future modular solutions to support fund distribution leveraging blockchain and smart contracts. We expect to test a minimum viable product dedicated to digital investor onboarding early next year. We are also very active in co-investing in blockchain market initiatives (Liquid Share, R3, Digital Asset Holding).

This year, what has been the most frequent topic brought up in custody banking circles?
Blockchain, big data and artificial intelligence are now considered must-have tools, and will gradually enhance the efficiency of business operations, increase the range and quality of services, and eventually challenge today’s business models.

What are your business priorities for the following 12-18 months?
Our main business priority is to support our clients’ international growth ambitions and business model adaptations, leveraging our recent breakthroughs in the US (such as the acquisition of the Janus Henderson fund services platform) in Europe where we are at the heart of a series of transformational outsourcing deals and in Asia-Pacific, including BNP Paribas’ strength in China. We will continue the three-year Augmented Custody programme – launched in 2017 – which will align our global and local custody offers, and continue to develop enhanced services such as our depositary solution powered by artificial intelligence.

BNP Paribas Securities Services
9 rue du Débarcadère
93500, Pantin, France
www.securities.bnpparibas.com
+33 (0)1 42 98 10 00

Ultimate parent company origin: France
Global number of employees working in custody: 11,329
Global assets under custody: $10,558 billion
Assets under custody EMEA: $9,329 billion
Senior executives in Europe: Patrick Colle (Paris), general manager; José Placido (London), global head of client development; Arnaud Claudon (Paris), head of asset manager

BNY Mellon
Daron Pearce – chief executive officer, EMEA asset servicing

Blockchain continues to be the most talked-about area of new technology within the asset servicing business. How far away are you from using DLT in any part of your custody or related businesses in relation to record-keeping for your asset manager clients?
We are committed to building institutional capabilities in this area, and in doing so, we are conscious of the high bar these solutions will have to address successfully the needs of the financial services clients we serve, particularly in relation to security and safekeeping.

This year, what has been the most frequent topic brought up in custody banking circles?
The impact of technology and, in particular, data science on operations and client service.

What are your business priorities for the following 12-18 months?
We are committed to ensuring that our custody proposition continues to meet the evolving needs of our clients. We have identified the following components for enhancement: a significant investment in our core technology infrastructure – an increase of 12.5% on our annual technology spend – to ensure we have a resilient technology ecosystem for our clients and regulators, and to enable our custody product to be more flexible, data-centric and service-driven; investment in automation and process improvement in areas such as onboarding, improved deadlines and instruction capture; and delivery of an increased range of optional, value-add services in addition to the core custody product.

BNY Mellon
One Canada Square, Canary Wharf
London, E14 5AL, UK
www.bnymellon.com
+44 207 7570 1784

Ultimate parent company country origin: US
Global number of employees working in custody: approximately 19,000
Global assets under custody: $33,600 billion
Assets under custody EMEA: n/d

Senior executives in Europe: Hani Kablawi (London), global CEO, asset servicing; EMEA chairman; Daron Pearce (London), CEO, EMEA asset servicing; Ileana Sodani (London), head of EMEA relationship development, asset servicing; Leoninque van Houwelingen (Brussels), CEO, The Bank of New York Mellon SA/NV

CACEIS

Caceis
1-3, place Valhubert
Paris 75206, France
www.caceis.com
[email protected]
+33 1 57 78 00 00

Ultimate parent company origin: France
Global number of employees working in custody: 1,850
Global assets under custody: $3,140 billion
Global assets under custody EMEA: $3,140 billion

Senior executives in Europe: Jean-François Abadie (Paris), CEO; Joe Saliba (Paris), deputy CEO; Philippe Bourgues (Luxembourg); managing director – CACEIS Bank, Luxembourg branch member of the CACEIS executive committee

CITI
Pervaiz Panjwani – global head of custody and fund services

Blockchain continues to be the most talked-about area of new technology within the asset servicing business. How far away are you from using DLT in any part of your custody or related businesses in relation to record-keeping for your asset manager clients?
We continue to develop new technologies across our business which services asset manager clients. In DLT, we have a number of external industry initiatives which we are currently progressing – these are across a range of activities and domiciles and aim to improve processes and reduce transaction costs for our clients. One such example is where ASX are replacing the Australian payment and settlement system (Chess) with a DLT-based platform. Citi, as a direct participant of Chess, will be interfacing with this new DLT system, including the implementation of a DLT node internally within our environment which we expect to be live 2020/2021.

We have also developed several DLT-based proof of concepts including messaging interfaces and simple trade life-cycle management. While DLT is an important focus, we do not believe that to bring significant benefits to our asset manager clients, we need to limit ourselves to one technology. Proxymity is a good example of this. It is a revolutionary approach to proxy voting developed by Citi: an online platform connecting companies directly with shareholders and providing real-time electronic data transmission between issuers and investors.

The platform eliminates numerous steps in the traditional proxy voting chain and delivers real-time communication of information and votes with full transparency to all parties. Asset manager clients have significantly more time to reach a voting decision and are able to access information readily and prove to their clients their ESG policies in practice. Proxymity is live in the UK market with plans for geographical expansion in 2019.

This year, what has been the most frequent topic brought up in custody banking circles?
Typically, discussion is focused on new technology and how it is being applied to our industry. A great deal of conversation is focused on the application of DLT but API connectivity also features strongly, as does natural language processing, machine learning, AI and so on. With regard to new technologies, the focus is on taking friction out of the end-to-end value chain and providing meaningful and insightful data for clients to act upon.

Second to this is cyber security and cost. Clients are looking for their custodians to help them deal with the ever-evolving cyber-security threats. Citi is at the forefront of the industry providing clients with IP recognition and ‘white list’ solutions. With regard to cost, clients want innovative solutions to drive efficiency using new technology rather than merely price depreciation.

Finally, we recognise that the industry is focused on more ethical and sustainable investing via ESG investing. This is a major focus for Citi as we move toward 2019.

What are your business priorities for the following 12-18 months?
We continue to focus on our data capabilities and the services provided to our clients from these capabilities via Clarity, our leading data delivery platform. Citi also continues to invest heavily in the use and deployment of new technologies to take friction out of the value chain and to deliver data faster to our clients and deliver meaningful insights.

We are launching our ACEs platform to service ETF administration and custody and to complement our support across issuance, research and development and trading. Our ACEs platform provides full automation across the administration services and workflow for asset management clients, overlaid with dashboards and analytics, providing clients with full visibility and control of processes.

We are also bringing innovative products into our transfer agency (TA) service set, with our proprietary end-to-end asset-based commission platform being a prime example. The platform fully integrates with our TA offering to support the maintenance, calculation, payment and reconciliation of asset-based commissions such as trailer fees and retrocessions. This product will evolve asset-based commissions, which have been historically challenging to support given the varied agreements between fund managers and distributors. The new platform will support the most complex of term agreements within a fully automated process.

Citi
Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, UK
https://www.citibank.com/mss/products/investor_svcs/
[email protected]
+44 2075082528

Ultimate parent company origin: US
Global number of employees working in custody: 6,847
Global assets under custody: $22,850 billion
Assets under custody EMEA: $10,600 billion

Senior executives in Europe: Pervaiz Panjwani (London), EMEA head of custody and fund services; Rob Ranson (Dublin), EMEA global custody product head; Fiona Horsewill (London), EMEA head of product development and strategy for custody and fund services

HSBC SECURITIES SERVICES

HSBC Securities Services
8 Canada Square, London E14 5HQ, UK
[email protected]
www.hsbcnet.com
0207 991 8888

Ultimate parent company origin: UK
Global number of employees working in custody: 7,531
Global assets under custody: $7,589 billion
Global assets under custody EMEA: $2,938 billion

Senior executives in Europe: Richard Godfrey (London), acting global head of HSBC Securities Services; Rafael Moral (London), head of securities services, Europe; Tony McDonnell (Dublin), head of sales and business; development, Europe; Nick Titmuss (Edinburgh), head of service delivery, HSBC Securities Services, Europe

J.P MORGAN

J.P Morgan
Address 25 Bank Street
London, E14 5JP, UK
[email protected]
www.jpmorgan.com
001 212 270 6000

Ultimate parent company country origin: US
Global assets under custody: $22,600 billion
Global assets under custody EMEA: $6,100 billion

Senior executives in Europe: Christopher Rowland (London), global head of custody; Mike Hughes (London), head of global custody

NORTHERN TRUST
Clive Bellows – head of global fund services EMEA

Blockchain continues to be the most talked-about area of new technology within the asset servicing business. How far away are you from using DLT in any part of your custody or related businesses in relation to record-keeping for your asset manager clients?
We launched the first commercial deployment of blockchain technology for managing the administration of private equity (PE) funds as well as strengthening our PE audit, allowing firms to audit PE life-cycle events, directly from the blockchain. In this live product we administer the assets of a number of PE funds, recording the investor holdings within.

This year, what has been the most frequent topic brought up in custody banking circles?
How custodians are positioning themselves for the future and the services they will provide ten to 20 years from now. As custody banks continue to leverage technology to improve efficiencies and the client experience, many are starting to move away from some of their core functions and focus investment in additional areas such as front-office solutions.

What are your business priorities for the following 12-18 months?
     •  Technology investment supporting client’s data and regulatory needs – including a five-year project providing superior capabilities across fund accounting, transfer agency, middle office and custody.
     •  Build out our continental European business – we are established as a top-ten asset servicing provider in Luxembourg and leading administrator in Switzerland and we want to continue this growth.
     •  Supporting clients with growth and distribution ambitions: to support entering new markets or on-boarding with a fund platform.
     •  Help overseeing distribution networks.
     •  Providing insight into managing costs and operations, and help with the regulatory burdens.

The Northern Trust Company
50 Bank Street, London E14 5NT
www.northerntrust.com
+44 0207 982 2000

Ultimate parent company origin: US
Global number of employees working in custody: 13,400
Global assets under custody: $8,101 billion
Assets under custody EMEA: $2,664 billion

Senior executives in Europe: Teresa Parker (London), CEO EMEA; Penny Biggs (London), UK SMF regional practice executive Ins Sls/RM; Toby Glaysher (London), executive vice president and head of global fund services international; David Marlborough (London), executive vice president, head of risk management EMEA

PICTET & CIE
Claude-Joseph Pech – head of Pictet asset services sales & CRM

Blockchain continues to be the most talked-about area of new technology within the asset servicing business. How far away are you from using DLT in any part of your custody or related businesses in relation to record-keeping for your asset manager clients?
We are actively exploring and testing solutions in the DLT space. We believe DLT will have a significant impact across many, mostly admin-heavy, activities in the financial services arena.

Relying on our current business model and expectations, we are focusing resources on increasing efficiency in OTC transactions, asset tokenisation, and digital asset custody. Indeed, we continue to develop internally blockchain-based, mostly technical, prototypes around OTC trading and settlement, as well as digital asset custody.

We are also an active partner and participant in ScoreChain, the Luxembourg-based consortium of asset managers and transfer agents working on blockchain-based funds distribution. Moreover, we also exchange proactively and on a regular basis with fintechs, banks, and technology providers active in DLT. We maintain these relationships to explore potential partnerships or collaborations on specific topics and to stay attuned to the latest developments happening in our industry.

This year, what has been the most frequent topic brought up in custody banking circles?
The most frequently raised topic has been regulatory changes, as it has been for many years now in our booking centres.

The other topic is quality service level, which has been to our advantage as we are increasingly approached by institutions or asset managers that are now looking at expertise and superior levels of service quality over cheap pricing.

Whilst custody has been mistakenly regarded as a simple commodity, we now see that it is a service that can be highly complex and clients can place high expectations on service level.

What are your business priorities for the following 12-18 months?
Pictet Asset Services does not want to build on critical mass. Even though we now have over $500 billion in custody, we want to maintain our tailored made and agile custody services approach. Digital solutions, following up on IA and RPA initiatives to enhance service quality level and control costs are definitely our priorities, while maintaining our intuitu personae approach that derives from our private banking DNA.

Pictet & Cie
60, route de Acacias
Geneva 1211, Switzerland
www.group.pictet
+41 (0)58 323 23 23

Ultimate parent company origin: Switzerland
Global assets under custody: $463 billion
Global assets under custody EMEA: n/d

Senior executives in Europe: Claude-Joseph Pech (Luxembourg), head of PAS sales & CRM; Marc Briol (Geneva), CEO Pictet Asset Services; Gilles Paupe (Geneva), head of institutional Switzerland - Pictet Asset Services

RBC INVESTOR & TREASURY SERVICES
Sébastien Danloy – chief executive, RBC Investor Services Bank

Blockchain continues to be the most talked-about area of new technology within the asset servicing business. How far away are you from using DLT in any part of your custody or related businesses in relation to record-keeping for your asset manager clients?
RBC I&TS is working with an industry group in Luxembourg which is exploring relevant applications of blockchain technology for transfer agency. In addition, we are investigating ways to integrate distributed ledger technology within our business where we believe it would add value.

This year, what has been the most frequent topic brought up in custody banking circles?
The biggest topic has definitely been the transformative effect technology is having on our industry, including blockchain, big data and robotic process automation. At RBC I&TS we are making significant investments in these areas to ensure we are capturing the benefits of these technologies for our clients.

What are your business priorities for the following 12-18 months?
One of our priorities for the upcoming year is helping our clients operate in a more insight-driven manner. RBC I&TS plans to launch a secure cloud-based analytics platform, providing a complete infrastructure for clients to manage their data and develop sophisticated insights using that data.

We also expect continued growth in our Private Capital Services (PCS) platform, which supports funds in real estate, private equity, private debt and infrastructure. To ensure our offering is industry-leading, we have built a dedicated PCS unit with experts who are focused solely on this asset class.

RBC Investor & Treasury Services
2 Swan Lane
London EC4R 3BF, UK
www.rbcits.com
+44 020 7653 4000

Ultimate parent company origin: Canada
Global assets under custody: $2,497 billion
Global assets under custody EMEA: $734 billion

Senior executives in Europe: Harry Samuel (London), CEO; Francis Jackson (London), head of global client coverage; Joanna Meager (London), global head of client operations and head, UK; Sébastien Danloy (Luxembourg), CEO, RBC Investor Services Bank S.A

SEB BANK
Tomas Engel – head of sales investor services

Blockchain continues to be the most talked-about area of new technology within the asset servicing business. How far away are you from using DLT in any part of your custody or related businesses in relation to record-keeping for your asset manager clients?
We are currently collaborating in several DLT initiatives driven by established market participants as well as new entrants. We have one publicly announced initiative related to using DLT for record-keeping of fund units for asset manager clients.

Since it involves many market participants, it will be a challenge to agree on a complete new business model and new technical solution. If any of our ongoing or future initiatives are successful, our estimation is that it will take two to five years before using DLT in this area.

This year, what has been the most frequent topic brought up in custody banking circles?
The custodian ability to demonstrate financial and competence commitment, compliance support, support new revenue streams, dealing with complex products, willingness to create new operating models, protecting data against cyber and other attacks. This takes a stance in IT development trends and acts as a knowledge developer for clients so that growth happens in a symbioses between clients and custodians. The custodians’ survival expectancy is als o judged upon its understanding that this is still a people business.

What are your business priorities for the following 12-18 months?
To continue our aggressive Nordic growth case for domestic clients in all related business lines. Continue expansion into Tier 1 client base and become even more relevant when it comes to providing services in new areas of clients’ revenue and quality streams, like alternatives and ESG. For sub-custody, we are significantly speeding up on adding further seniority in order to cement our position as the leading Nordic sub-custodian and continue helping clients navigate the ever more dire straits with new tax regimes and new CSD environments that we see in most Nordic markets.

SEB
Kungsträdgårdsgatan 8
106 40 Stockholm, Sweden
www.sebgroup.com
+4687635000
Ultimate parent company origin: Sweden
Global number of employees working in custody: 325
Global assets under custody: $917 billion
Global assets under custody EMEA: $917 billion

Senior executives in Europe: Tomas Engel (Stockholm), head of sales, investor services; Ann Manusson (Stockhom); Joachim Alpen (Stockholm), head of large corporates and financial institutions; Johan Torgeby (Stockholm), group CEO

SOCIETE GENERALE SECURITIES SERVICES
Bruno Prigent – head of Societe Generale Securities Services

Blockchain continues to be the most talked-about area of new technology within the asset servicing business. How far away are you from using DLT in any part of your custody or related businesses in relation to record-keeping for your asset manager clients?
Blockchain works on a community basis and SGSS is part of different initiatives such as LiquidShare in France or FundsDLT in Luxembourg. SGSS has also settled subscriptions/redemptions in funds with Iznes.

This year, what has been the most frequent topic brought up in custody banking circles?
Regulations are still a very hot topic. After an immediate impact on capital markets, MiFID II is having a slow and inevitable upheaval for distribution everywhere in Europe, with a risk of ‘Uberisation’ of the market. The low or negative interest rates are a major worry of asset owners, and the pressure on fees by passive investment and larger asset managers are triggering specialisation strategies of mid-size asset managers and market consolidation. ESG integration has switched being from a topic to being indisputable. However, the most frequent and important topic is to implement new technologies, such as data management, AI or robot process automation.

What are your business priorities for the following 12-18 months?
SGSS’s ambition is to help clients develop their business: streamlining their processes with CrossWise, a modular front-to-back solution that covers a portfolio management system, dealing services and middle office outsourcing; and optimising their distribution with D-View, which provides distribution intelligent analytics.

Societe Generale Securities Services
1-5 Rue du débarcadère, Immeuble Perspective Défense
Colombes, 92700, France
www.securities-services.societegenerale.com
[email protected]
+33 01 42 14 89 39

Ultimate parent company origin: France
Global number of employees working in custody: 4,000
Global assets under custody: $4,956 billion
Assets under custody EMEA: $4,956 billion

Senior executives in Europe: Bruno Prignet (Colombes), head of SGSS; Pascal Guillot (Colombes), global head of securities banking operations; Christopher Baurand (Colombes), head of coverage, marketing and solutions

STATE STREET
Elizabeth Nolan – chief executive, Emea, State Street

Blockchain continues to be the most talked-about area of new technology within the asset servicing business. How far away are you from using distributed ledger technology (DLT) in any part of your custody or related businesses in relation to record-keeping for your asset manager clients?
We experiment with blockchain in three ways: internally - software development, conducting private trials with vendors and partners; collaborating - we belong to industry consortiums, including the Post Trade Distributed Ledger Group, which researches opportunities for blockchain, and we work with fintech start-ups and universities in Ireland, Italy and China; piloting - we experiment with emerging technologies, looking at new ways of tracking and transferring assets.

This year, what has been the most frequent topic brought up in custody banking circles?
Regulation – which has increased significantly in recent years. Market participants have to report more to regulators, with requirements varying for different products and countries. Major developments for 2018 include MiFID II, EU Money Market Fund Reform, Benchmark Regulation and GDPR.

What are your business priorities for the following 12-18 months?
Technology and regtech, given the focus on regulation. Firms are looking for improved risk management tools, to reduce costs and improve efficiencies. Regulators are asking for more data, and firms will be looking for best-practice tools to help them meet regulatory requirements, and avoid errors and non-compliance.

State Street
20 Churchill Place, Canary Wharf
London E14 5HJ
www.statestreet.com
+44 20 3395 7000

Ultimate parent company origin: USA
Global assets under custody: $25,400 billion
Global assets under custody EMEA: $4,600 billion

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