One of the heads of Citi Transaction Services speaks exclusively to Global Custodian on the main challenges facing financial intermediaries.
“Well there are three big moves in the markets that are happening, which are mainly effecting the financial intermediaries,” says Tom Isaac, managing director of financial institutions global transaction services at Citi. “The first is that they are trying to rebuild their businesses following the credit crunch. Secondly, there is the dramatic change, in terms what technology has had for smart order routering. And, of course, the third main challenge is regulation. So the combination of those three issues means that every financial intermediarie is looking at its business model and re-looking at the way it has got to operate. Financial Intermediaries also has to look at how it can future proof itself to the technology and regulatory changes while at the same time trying to further grow its business.”
Citi Global Transaction Services currently offers an integrated treasury and trade solutions and securities and fund services to multinationalcorporations, financial institutions and the public sector around the world. To date, it currently has over $276 billion in average liability balances and over $12.8 trillion in assets under custody.
However, despite the challenges, Isaac says that there are a number of reassuring elements in the marketplace.
“From a liquidity perspective, the asset classes that people are investing in have immediately moved after the financial crisis of 2008,” says Isaac. “We saw a move away from equities- cash was king – the fixed income space was tough and everyone withdrew from the emerging markets. However, over the last two years, the emerging markets started to grow again, with particularly strong growth in Asia. So liquidity is coming back and investors have been coming off the sidelines.”
For the full interview with <b> Tom Isaac, managing director of financial institutions global transaction services at Citi </b>, keep checking out <b> www.globalcustodian.com </b> for the full video interview.