BNP Paribas recently unveiled an expanded range of market and financing services for institutional investors and buy-side firms as they seek to extract more value from assets they entrust with custodians while limiting their risk exposure and navigating new regulation. Alongside custody, clearing and fund administration, the banks Market and Financing Services business line offers principal and agency lending, foreign exchange and collateral management as well as a variety of financing solutions to asset owners, asset managers, including alternatives, and broker-dealers.
Part of the offering is a fully outsourced dealing service for buy-side firms. BNP Paribas is first to market with this service.
Global Custodian spoke to Florence Bonnevay, head of Market and Financing Services, BNP Paribas Securities Services, about the banks new approach.
Why have you launched this business line?
Were trying to put under one roof the services that make sense principal and agency lending, foreign exchange and collateral management. The new service will be aimed at buy-side firms, namely asset owners, asset managers, including alternatives, and broker-dealers. It will help fund managers, for example, to concentrate more easily on their assets while those assets are put to work. Those fund managers are put in touch with the dealers, via BNP Paribas, for those value-added services, in addition to having their core custody with BNP Paribas Securities Services. The new business line will leverage the relationship the securities services division has with its existing clients. Weve also put collateral management in the service offering to make it a more meaningful proposition.
BNP Paribas has offered these services previously. What is different about the new business line?
This is a new service weve integrated within securities services. Although we’ve offered some of these previously, this formal unveiling is in response to the demand for these services that we’ve seen since the beginning of the year. Weve offered financing previously, as it was needed. Then there is a separate clearing offering and securities lending, both principle and agency, where we have seen more demand. Now we offer an outsourced dealing service for institutional investors and intermediaries participating with each other in the value-added chain under one roof. We have positioned ourselves as a fully integrated banking service provider to the buy side, managing their dealing, collateral and liquidity requirements, enabling them to concentrate on their core business.
Who are your competitors, and how will you diversify?
Most competitors are in the broker-dealer segment, usually for equities. What makes us different is that our service will be outsourcing for asset managers, including for equities and fixed income. We have clients who want to diversify their asset classes. This can be very costly. With multiple asset classes, its one thing to analyze and another thing to execute. Our operating model will enable them to do this. The service will enable us to enter the middle office of buy-side firms while offering them custody and fund administration, including reporting, through securities services. Dealers and traders have a different expertise than custody. We can now offer them pools of expertise, including OTC clearing and analysis.
How will this integrated service help your clients?
An integrated service reduces operational risk that comes about by having numerous interfaces. With this there will just be one interface, reducing risk and increasing profitability.
– Janet Du Chenne