Managing director, head of global clearing and collateral management ● The Bank of New York Mellon
In the nearly half century that Mark Aprahamian has been working on Wall Street in securities services, he’s seen many things come and go (including the World Trade Center, not-yet built when he ﬁrst entered the business and gone again today). But the early prediction that custody was going the way of the dinosaurs never panned out.
“Once DTCC came in, they started to talk about the demise of custody, that the entire world would be a web of CSDs,” says Aprahamian. “Here it is 45 years later, and custody is still going strong.”
Aprahamian has been with nearly all of custody’s heavyweights: Morgan Bank, Chase Manhattan Bank, Citibank, Barclays and The Bank of New York Mellon. Today, at The Bank of New York Mellon, he leads the bank’s global clearing and collateral management business. For all the changes he’s witnessed on Wall Street, though, the only prediction that’s come to pass is the industry becoming less focused on settlement and more on information. And despite many improvements, some things have stayed largely the same.
“The world’s gotten smaller, but many of the same mistakes are being made today as were made in 1964,” he says, citing cultural misunderstandings and miscommunications, such as mistaking Australian dollars for US dollars. As the market begins to emerge from the extreme turmoil of the past year, a whole new client base has appeared: hedge funds. “That’s an exciting development, because it’s a new, challenging environment for us,” he says. “They have much different expectations than a traditional custody client. In the hedge fund world, they want to know what’s going on with a trade right to the very end. Custodians have to know their game and continue to innovate to meet clients’ evolving needs.”
It hasn’t been all good news on the backside of the crisis, though. As Aprahamian’s generation starts to retire from the business, he worries that securities services might start to experience a brain drain. “Recent events have scared people away from custody and clearing,” Aprahamian says, “and that’s a concern. That’s something all banks need to focus on: ﬁnding the next generation of people who will work in this business.”