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Magazine Issues » October 2020

Custody directory 2020


Clive_BellowsCLIVE BELLOWS, HEAD OF GLOBAL FUND SERVICES EMEA, NORTHERN TRUST

Please tell us something about the stresses and strains of delivering asset services during 2020, due to the onset of the virus and lockdown.

As their asset servicer, our focus through the disruption and volatility of the pandemic has been on helping clients progress their businesses’ plans and communicate with their investors. Like our clients, we have had to adapt to the impact of the pandemic and find ways of working to ensure the continued delivery of effective solutions for them. Our teams have put in huge efforts to achieve this – particularly through the initial stages of most significant disruption – and our IT infrastructure and teams continue to evolve to the demands of widespread remote working.

One of the main challenges for us and our clients is to continue working to make necessary adjustments to our working arrangements and ensure that everyone is and feels supported. When not meeting face-to-face, this is sometimes harder, but it is driving our teams to collaborate more closely and we expect to emerge from current conditions stronger.

What will custodians be focusing on most in the year ahead, both generally and with respect to asset management clients?

The pandemic has further accelerated the take-up of digital technologies across asset management. Asset servicers, in providing custody and data-orientated services, have seen how the need for real-time reporting and high-quality data is now more relevant than ever for investment managers and their investors, given their experiences through the disruption caused by the pandemic.

As data and digital technology are increasingly central to our clients’ success, we likewise expect to see continued focus among global custodians on the use of digitisation to help increase efficiencies, improve automation and create value.

That’s why, while our initial focus through recent months was on maintaining business-critical asset servicing functions, we also continued the deployment of functionality for our digital technology platform, Northern Trust Matrix.

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

Ultimate parent company origin: USA
Global number of employees working in custody: 10,374
Global assets under custody: $9,290 billion
Global assets under custody EMEA: $3,020 billion

Senior executives in Europe: Teresa Parker (London), CEO EMEA; Toby Glaysher (London), executive vice president and head of global fund services international; Clive Bellows (Dublin); executive vice president and head of global fund services EMEA; David Marlborough (London), chief risk officer EMEA and APAC region


CLAUDE-JOSEPH PECH, HEAD OF BUSINESS DEVELOPMENT AND CLIENT RELATIONSHIP MANAGEMENT, PICTET ASSET SERVICES

Standardisation across the asset servicing industry is vital to back-office efficiencies. Has standardisation gone far enough to reduce operational friction and costs for asset managers and their clients? What sticking points remain, if any, and what needs to happen?
At a time where products continue to complexify, clients are shifting away from vanilla assets towards private assets and regulators as well as clients asking for dedicated reports and controls, standardisation could be seen as excessive and even outdated.

The idea behind standardisation was essentially to reduce cost and boost operating margins for asset managers, but when you look at it at a macro level, it is often no longer that efficient, as it often cannot handle the instruments and the overall complexity asset managers are currently dealing with.

For us, supporting new asset classes, leveraging on technology to avoid the ‘one size fits all’ and focusing on quality and risk controls are the main priorities, rather than just improving operational efficiencies.

There are better ways to reduce costs without standardising, for instance through digital solutions.

Please tell us something about the stresses and strains of delivering asset services during 2020, due to the onset of the virus and lockdown.
In 2020, resilience became a key factor for asset managers when selecting their service providers. Indeed, with the extreme scenario we lived, BCP plans became a moment of truth for the entire industry, as they had never been tested before at a large scale. Some discovered the hard way that a centralised operational hub, or offshoring in countries not equipped to handle work from home, became a real issue.

At Pictet, we decided many years ago to keep our entire operational value chain internal (and therefore don’t rely on external counterparties). Thanks to this, we were able to implement our BCP [business continuity plan] swiftly, and most clients barely noticed any changes.

The lockdown period came with obvious limitations to our service personalisation abilities and progress on certain projects, but thankfully this was temporary and we are back to normal now.

What will custodians be focusing on most in the year ahead, both generally and with respect to asset management clients?
The focus will be to respond to evolving client expectations. As we see it, clients will expect providers to offer solid digital capabilities, strong abilities in data analytics (especially for fund distribution), to offer or enable regulatory assistance and to provide support on new products and services (e.g. ESG – environmental, social and governance). We see that many asset managers expect asset servicers to act as an extension of their business outsourcing (trading/middle office). Also, they expect more tailored options to fit their needs, and in some cases unbundled services.

Pictet & Cie (Europe) SA
15A, avenue J. F. Kennedy
1855, Luxembourg
www.group.pictet
+352 467 171 1

Ultimate parent company country origin: Switzerland
Global number of employees working in custody: More than 1,400, mainly in Luxembourg and Geneva
Global assets under custody:$ 527.439 billion
Global assets under custody EMEA: n/d

Senior executives in Europe: Marc Briol (Geneva), CEO Pictet Asset Services; Claude-Joseph Pech (Luxembourg), global head of business development and client relationship management of Pictet Asset Services; Gilles Paupe (Geneva), head of institutional Switzerland – Pictet Asset Services; Bettina Graeber (Luxembourg), head of institutional Luxembourg – Pictet Asset Services