BlackRock sees Aladdin as crucial to custodial relationships

World's largest asset manager revealed it is using its in-house technology to increase the efficiency of its custody relationships.
By Joe Parsons

BlackRock’s CEO Larry Fink has said it has positioned its flagship risk and portfolio management system, Aladdin, as a key component to creating efficiencies with its custody bank partners.

Speaking on its first quarter earnings call, the chief executive of the world’s largest asset manager said that it is using technology developed in-house to drive efficiencies across its custodial and client relationships.

“We look at technology as a great efficiency provider for investing for custodial assets, for communicating with our custodial clients, for communicating with our employees, for communicating with our clients. So it is the key element that is going to transform BlackRock,” said Fink.

“As we now have Aladdin provider working with the custodial banks, ultimately it’s going to simplify our trading, [and] trade entry compliance working alongside the custodial bank to create so much more efficiency for users across the Aladdin system.”

At the end of last year, BlackRock transferred over $1 trillion in assets from State Street to JP Morgan in what was one of the biggest custody deals of all time.

For JP Morgan, it allows the bank to greatly integrate with BlackRock’s Aladdin to link up directly to its other custody clients connected to the platform.

Speaking to Global Custodian earlier this year Jessica Hynes, head of custody consulting for UK, Europe and Middle East at Mercer Sentinel, said the deal will allow JP Morgan to become fully intergrated with the workflow it its largest clients.

“By partnering with their Aladdin system, JP Morgan becomes part of the BlackRock ecosystem, where there is no longer a clear distinction between front, middle and back-offices, but a seamless end-to-end optimisation of the trade flow,” said Hynes.