Since starting his career with Société Générale Securities Services (SGSS) in Paris in 1994, Mathieu Maurier has seen his share of change in the industry. After stints with the company in Johannesburg and Moscow, Maurier came back to Paris in 2011 as global head of sales and relationship management, at a time he describes as highly challenging, but also one that is ripe for growing the business.
What has changed since you came back to Paris?
MM: In the past, global custodians and asset servicing providers were really delivering services to clients. They were pushing products (e.g. custody, forex, securities lending, valuation), and what we can see today is that based upon the numerous changes of regulation that we are facing, and based upon the challenging market environment, we are now at SGSS much more about providing solutions for clients. In other words, the spectrum of services we are offering today has been multiplied by ten compared to a few years ago. And what has changed is that in the past, clients were saying, “Look, I need a custodian in that country. How can you help?”, which was really more or less a product request. However, today it is us saying to clients, “Look, these are the challenges you have to face, so based upon those challenges, let’s discuss the solutions that we can offer you.”…We are really taking on a consulting role, in a way that we have to be able to offer bespoke solutions and say, “This is a bespoke solution for you because we understand your needs, and because we understand your needs, this is what will best fit the challenges that you have to face.” This need to understand clients is why, at SGSS, we have put them firmly at the heart of our structure.
This is new. What does it require? It requires proximity to our clients, whereby, besides knowing your clients, which is a must-have, we have to enter into a strategy discussion with them. And you can not do this without trust, without knowing them inside out, and they must also know you inside out. It’s not a matter of saying “here I am; I know you; this is what you need.” No, it really has to be a relationship built on common trust, and that requires time. As you know, trust is not something that can be won on an overnight basis.
Does building that trust make it difficult to get new clients?
MM: We’ve never been as optimistic as we are today, because there have never been as many challenges within the financial industry as there are at the moment. Consequently there have never been as many opportunities for us to accompany our clients through these challenging times. We’ve been extremely busy discussing with highly reputable organizations in Europe and elsewhere to define what will be the best operating model. If you are a big asset management firm and you still have some back-office and middle-office structure, you want to streamline your costs. You want to refocus yourself on what you do best, which is investment management, and we definitely have opportunities there. It is exactly the same when we are speaking to broker-dealers. We migrated the largest independent broker (Kepler Cheuvreux) to SGSS a few months ago, which was a huge migration in Europe. We are helping them maximize, or minimize so to speak, the collateral required by CCPs across Europe, and this is something we are really delivering on. So you can see that we are delivering solutions, but there is not “a” solution; there are many possibilities. Trying to define the best route with a client in the current environment may look like driving a car in the fog, and you have to be very careful because your client is sitting in the back.
What are the top challenges you are facing?
MM: The challenge is one that we are all facing—the challenge of how we can provide bespoke services but still be able to increase the profitability of the business. So you have to invest; you have to optimize your priority model…The thing is that the current financial environment is making a number of banking organizations go back to basic types of products or services. [But] I’m not saying we are back to basics because securities services providers are operating in a highly complex environment; the industry has had to adapt, so what used to be basic in the past is no longer basic today.
What do you anticipate happening over the next few years?
MM: Why we are so busy is that there are numerous inefficiencies linked to the fragmentation of markets, and Europe is a good example. So, with all the regulatory changes, together with changes in the market infrastructure, we are definitely helping our clients to define the best possible model across Europe (in regards notably to EMIR, UCITS IV, MiFID II and AIFMD)…We are helping private banks to lower their cost base and optimizing their back office and middle office. T2S is definitely on the top of our agenda, and we’ve been working on it for many years now…There’s also the T+2 initiative, which is more or less linked to the T2S project. It’s like a moving target. It doesn’t change the strategy much. The strategy is really to deliver value to our clients at a time when the challenges are the most important. But it’s a moving target, and that’s why I’m saying it’s a bit like driving in the fog. You have to be careful not to hit the trees on the side of the road, and so far, we are doing well.”