Singer, Monica(1)

Monica Singer describes herself as a socialist who wants to save the world. She also freely admits that before joining South African CSD Strate in 1997 she had never owned a share. However, looking back, Singer says she was fortunate enough to find roles in financial services that in many ways helped to fulfill her humanitarian ambition.
Inducted: 2014
Chief Executive Officer • Strate

Monica Singer describes herself as a socialist who wants to save the world. She also freely admits that before joining South African CSD Strate in 1997 she had never owned a share. However, looking back, Singer says she was fortunate enough to find roles in financial services that in many ways helped to fulfill her humanitarian ambition.

The first of these came after a role at the World Bank in Washington, D.C. in 1995, which was as part of a secondment from the South African Institute of Chartered Accountants. Following the secondment, Singer returned to South Africa in search of projects that would allow her to make a difference in society. She got in touch with Roy Anderson, then CEO of the Johannesburg Stock Exchange, who was looking for a project manager for the electronic settlement of equity transactions in South Africa.

“At that time, South Africa was characterized as the worst emerging market in the world for settlement and operational risk,” Singer recalls. “I thought perhaps I could make a difference, and South Africa could be seen as one of the best in the world as opposed to the worst.”

Singer’s appointment began with BankServ, an initiative co-owned by the big four South African banks—Absa, FirstRand, Nedbank and Standard Bank—as well as the JSE. The JSE took over the project and Singer’s employment shifted to the stock exchange, where she worked to form Strate into a legal entity separate from the stock exchange. When the project was ready to go live, Singer successfully applied for the job of CEO, then took direct ownership of Strate, making it one of the best CSDs in the world.

On becoming CEO, Singer’s strategy for Strate was simple: Don’t reinvent the wheel. “I was humble enough to recognize that I didn’t really have the knowledge of the whole program management [in securities settlement], so I said to myself the only way to succeed in this project is to surround myself with the best people in the industry,” she says.

Singer went around the world visiting the CEOs that had implemented a settlement system. “I was able to learn from Sir Iain Saville how to make something successful as he had implemented Crest. Also, at the time the Taurus project failed, I had started the Strate job, so I was able to learn how not to make those mistakes. In addition to surrounding yourself with intelligent people, it is also important to create good partnerships.”

Among Strate’s successful partnerships is the one it created with Swiss financial services provider SIS, which provided the technology for Strate’s settlement service. “The partnership we signed with SIS in 1997 was the best thing we could have done,” she says. “We then signed a technology partnership with Tata Consultancy Services in India in 1997. The key was to form partnerships.”

This partnership approach also had wider benefits for the securities industry, says Singer. “When Strate was building a network I looked around and saw that the banks were using SWIFT. We also wanted to use SWIFT, but back in 1997 this utility was only using payment messages. They were brave enough to use us as a pilot for SWIFT messages for securities. Strate came up with the idea for SWIFT to let us use their network.” Today more than 50% of SWIFT traffic is for securities messages.

Singer recalls the long and winding road to Strate’s profitability. Since its launch in 1999, the CSD saw three years of huge losses. “Due to the technology fears in the market around Y2K, we were only allowed to go live with one company,” she says. “We were then allowed 12 companies a year later, so we ended up bringing all the listed companies into Strate two years after the due date, meaning that for two years it had no income.”

Strate only turned profitable in 2006 when the CSD settled its accumulated losses. Singer has a framed paycheck for R560 ($60), which was her first income from Strate following R250 million ($26 million) of shareholder investment over two years. “There were fears that our technology was not going to sustain the volume, so we had to introduce everything very slowly, so for two years we had a delay that generated huge losses,” she says. “After two years of being live we had to go back to the shareholders and ask for more money. That was very hard.” Now Strate has “more than paid a market-related return to our shareholders. We have kept expenses under control and we are constantly looking at new sources of revenue. We started with equities and then brought in warrants, money market instruments and bonds, and we are now bringing in collateral management.”

Strate’s latest partnership with Clearstream will allow it to reduce its dependence on one source of revenue—85% of the revenue is dependent on the volumes of transactions on the JSE. “We are buying the license to use their technology, worth billions of euros, and by the end of 2013 we are going to have connectivity to our market for full functionality of collateral management,” says Singer.

“We’re constantly looking at what else can we do to grow this company. Firstly, we keep expenses to the bare minimum, because we are mindful that this is a company in the national interest. We have to generate returns for the shareholders whilst being mindful that we cannot increase the prices for investors. We are conservative and strong in our cash flow to be able to set aside that cash flow to do projects such as the one for collateral management. This helps us to be self-sufficient enough to expand and to do projects in the national interest that are of value to all stakeholders.”

Importantly for Singer, the story of her time at the CSD is one of personal fulfillment. “The reason I love this company so much is not only because the financial markets are changing all the time and there is innovation, but because it is a platform that allowed me to make a difference in the world, because South Africa is now categorized by the World Economic Forum as the third-best financial market in the world after Hong Kong and Singapore,” she says.

Strate’s development appears to have been equally satisfying and challenging for the company’s employees—it has consistently won accolades as the Deloitte Best Company to Work For, and Singer says Strate’s staff members have also been able to share in the successes of those less fortunate. Strate has charitable schemes to involve the company and staff members in contributing to orphanages, frail care and education. These projects receive at least 1 percent of Strate’s profits as well as the money, time and expertise donated by employees to those in need. Singer concludes by saying that spreading this goodwill to many people in South Africa is a major source of career fulfillment. “From when I was little, I knew I would one day be put in a position to make the world a better place and help people, and that is what I get at Strate.”

—Janet Du Chenne