GC: Can you describe the career path that led you to securities services?
Richard Godfrey: I started my financial career in 1983 within industrial-branch insurance, where I used to do the admin, accounts and recordkeeping for salespeople who went door-to-door collecting insurance premiums. I worked for a company called Pearl, and I am pretty sure the money I collected that then went into investments in those days are now currently held in our [HSBC’s] custody business.
In terms of working in a multi-client environment, which is where securities services starts as an industry, it was the end of 1998 when I joined Mellon. I worked between 83′ and 98′ in the back-offices of insurance companies and asset management companies.
GC: What was the state of the industry when you first began your career in securities services?
RG: I joined Mellon as a director for projects and strategy, which also encompassed IT and products. My first two years were quite eventful as we had the Y2K challenge. There was a big remediation project around that, and at the same time we had won a mandate to build and launch the UK’s first fund supermarket, which was Egg (the digital brand of Prudential). I was involved in selling, designing and building that solution, which was the first e-commerce platform for funds.
After a couple of years, I ended up becoming the CEO of European fund services and spent the next four years running that business. We had two businesses at Mellon: a joint venture with ABN Amro, and the wholly-owned business that I was the CEO of.
It was a good period for the industry at the time for two reasons. One, technology was starting to be appreciated as a differentiator – the fund supermarket was a good example of that – but there were other areas such as performance analytics where the power of technology was coming to the fore. Second, it was a good growth period where we took our
revenues up nearly three times in those four years, with some quite sizeable deals as the industry started to move rapidly from an in-house to an outsource model. It was a good period to be in charge as you could build new and exciting things, and there was a real interest around these products.
GC: What took you from Mellon to HSBC and how did you find the transition?
RG: I set up their first Asian service centre in Pune, India. I saw the shift of interest from investors towards Asia, and saw the importance of Asia as source of talent going forward. It became very apparent that having the advantage of being in the East would become material. I felt HSBC had the natural advantage to compete for where the growth is and where the talent is. That is what interested me with HSBC.
When I arrived, HSBC had just purchased Bank of Bermuda. HSBC had been in a period of carrying out a number of acquisitions and had the challenge of rationalising the underlying infrastructure. Soon after that came the global financial crisis,. You end up learning a lot in times of adversity for you and your clients.
HSBC has such a broad product base that your ability to work with relationships and bring unrivalled combination of services to the fore was very significant to me. I had come from a firm of 20,000 to one that had nearly 300,000 people. It probably took me 18 months to get my arms around the whole product base you can bring as a universal bank.
GC: What standout projects were you involved in?
RG: The platforms we have today are core global platforms rather than multiple local platforms. I have been involved in a lot of projects that have delivered on that underlying technical platform with which we now serve clients globally. As painful as it is – installing global platforms is absolutely essential going forward.
I have been involved in quite a few of our largest client wins, particularly when they involve multiple geographies. In some of those cases, we were launching our products in new locations and are now full-service with our global platform.
I have been a COO twice, I have led a regional [Europe] business, and led one of the product areas [strategic outsourcing] before taking on this [co-CEO] role, so I have been pretty lucky to work across multiple areas.
GC: What makes for a good day at the office?
RG: The most important thing is relationships, both clients and employees, and seeing them develop. In my view, it is a fairly simple business we run – if our clients do well, and we help them to do well, then so do we. When you see that happening, that is a good day at the office. Similarly, when you see people work well in teams that is a good day for me, as well as finding solutions to problems.
The test for me of having a good day is having enough time to think about the future. When I was global COO, my job was to create that time for the CEO so they didn’t have to worry about everything and instead focus on the top three to five things. But thinking about what happens the day after tomorrow and thinking about the future is a good day. That is either on your own or considering that with others.
Another test is going at home at a reasonable hour and taking your best self home.
GC: What are your expectations for the business going forward?
RG: Technology is dominating the headlines, and there is some justification for that. But I don’t think the pace of change is that different from the rest of our lives. I am still a believer that in the medium-long term relationships will continue to be core to the way we do business.
We are seeing a consolidation of providers. Not just from M&A and joint ventures, but also the consolidation of providers by clients. Clients will choose fewer core providers for most of their services, and instead work with them on a strategic-relationship basis. The decisions our clients make to choose us are long-term decisions. The average tenure of mandates is normally a decade, so on that basis, they need to commit to a partnership. That puts a real focus on relationship development.