Totting up almost 40 years of service at Northern Trust, Teresa Parker now sits as president for EMEA, responsible for the bank’s business and regulatory affairs in the region. Parker’s impressive career has seen her based in London, Singapore and Chicago – holding various executive leadership roles including COO for Northern Trust’s global asset servicing business.
What have been some of your standout achievements during your time at Northern Trust?
I’ve been at the Northern Trust for my entire career – nearly 40 years – which I think is unusual, but I’ve benefited from how Northern Trust grew over time in global custody across three regions, North America, EMEA and APAC.
One of the first things I would look back on is really helping to build out our global custody platform in the 90s which allowed us to compete and scale and use automation in all the ways that allowed us to be successful.
Secondly, I would say my time in Asia-Pacific, just after the global financial crisis. We had very strong growth run then.
Then, most importantly, was probably the expansion we had in Australia, servicing the superfunds. Previously Asia-Pacific always had to have a separate solution to the rest of the world, because of the time zones. What we were able to do was create a solution that the rest of the world was using, and bring it to APAC. That created quite a distinctive thing for us and our clients.
Another would be the focus that we’ve had on building out our business in continental Europe. We always had a very strong business in the UK and Ireland. With Brexit, we made a strategic decision to create an EU bank in Luxembourg. We acquired UBS’ fund servicing business. So we have really grown in continental Europe as a result of some of those strategic decisions and the investments we made there.
Being in the industry for 40 years, you must have seen some quite significant changes in custody . What would you say are the biggest of those changes you’ve seen?
When I started the industry was entirely manual. Securities were paper, there were vaults, faxes, telexes. It was not very scalable.
I do remember a story when I first started where the reason that the US had T+5 settlement was to make sure that you always had a weekend to catch up because of all the paperwork.
One of the key things is just how much the industry has used technology and automation to scale and then be able to create platforms that are usable around the world. That’s pretty amazing.
One story I will tell you is that one of the ways that we used to get trade instructions was via fax and they would come in all night long, and sometimes the faxes would fall behind the machine and the trade was lost. So, one of our big innovations was to put a bin bag around the fax machine to make sure we didn’t lose the fax.
Now it’s all digital and automated, but those are the sorts of things that you had to do.
I also think about how automating the industry has helped to create digital information for our clients. This helps them in managing their businesses and enabling them to give more accurate information to investors, the various stakeholders, risk management, improving investment processes, and being able to model things. Much of that does come from what we actually helped create as a result of all of that automation. That’s a pretty substantial thing that’s changed over time.
The people have also had to change over time and the way that people have learned how to use the technology, how to interact with clients, how to think about digital strategies. So we used to worry about bin bags around fax machines, and now we’re thinking about how do we help sophisticated investment managers get better returns for their investors.
What projects are you currently working on?
I sometimes think of the industry in software and hardware. From the software perspective, that’s the people side of it – a lot of work on talent acquisition, talent development, attracting and retaining a broad base of diversity, and focusing on equity and inclusion.
Continuing to be a place that people want to work and have a purpose and believe in -that’s one thing I do spend a lot of time on – and that software part is really important.
Then there’s the hardware, including that move from some of the legacy technologies – I have responsibility for some of that, making sure it’s in line with our clients’ expectations around resiliency and data.
Also moving more into the front-office. A lot of global custody started out just being transactional banking, back-office reconciliations and slowly it’s been moving to the front office, so more investments around capital markets, around front-office solutions helping clients with their investment processes.
What would you say are the main trends we’re seeing now in the industry, and how different do you think it will look in five years’ time?
There’s an interesting quote that the future is in the present. I think the trends are very much here already and a focus on them will continue – especially in the areas of data, digitalisation and security.
For us in global custody, our focus on capital markets has led to us creating a holistic product set that has been very helpful for many of our clients and I think that will continue. Continuing to automate, getting rid of the manual administrative processes and a greater focus on more of the value-add.
There is an upgrade that’s happening – the move to the cloud, the way we can interface with clients. This means re-architecting so that you’re still doing the same things, but you’re doing it in a more sophisticated, efficient way. That gives you more flexibility.
I remember at the very beginning of the pandemic thinking to myself, is the pandemic disruptive or is it accelerating the change that’s already here? And I think it’s accelerated the change.
I also think the underlying technology from blockchain, that distributed ledger technology, potentially could create that next moment of scale in the industry where you can you still are doing the same thing, but you get rid of a lot of the reconciliations that are there, and that could make it much more efficient and timely, and real time.