Global ambition

Joe Antonellis

Joe Antonellis’ career at State Street started with an emphasis on technology and globalization and will no doubt continue that way as the bank, along with the rest of the industry, tries to find opportunities amidst the challenges

For nearly the length of Global Custodian’s 25-year existence, Joseph Antonellis has risen through the ranks at State Street, starting off in Mutual Fund Services, followed by various senior roles throughout the organization, leading up to his current position as vice chairman of the bank.

Since he started at State Street in 1991, he says the biggest change has been “the growth of the business in the U.S. and the speed at which it quickly expanded internationally,” as custodians, along with their clients, became more global.

“When I first joined State Street I saw the firm emerging as a leader in the business, driving globalization and enabling its clients to invest around the world and I wanted to be a part of that growth,” he says. “My first job here was rolling out the multi-currency technology that the industry now uses. At the time, State Street was the first to roll it out to enable global trading and reporting for client portfolios.”

This globalization also has been well received by Antonellis personally. “I think I have the best job in the world,” he says. “My parents were immigrants to the U.S. from Italy and in my current role, I lead the international business, so I’ve been fortunate to have an international bent to my career.”

In addition to keeping up with the international nature of the business, Antonellis has also witnessed clients’ needs becoming far more complex, and thus the securities services industry has had to keep pace with how clients invest.

“One of the other driving forces is the overall acceleration of the pace of change in the industry, as it moved from cash-based securities to derivatives to emerging markets to alternatives,” explains Antonellis. “Keeping up with that pace has driven us to develop new solutions and build an IT infrastructure to better meet our clients’ changing needs.”

Throughout the ‘90s and into the 2000s, the industry continually became more automated and efficient in order to match the rapid pace of development, which perhaps came as a bit of a surprise.

“If anything, up until the crisis, the pace of change was faster than anyone anticipated; the industry was seeing high double-digit growth, and we were moving as fast as we could to continue to meet our clients’ needs.”

Since the crisis, growth has of course slowed in many areas of the financial services industry. Top of mind for many firms has been dealing with the multitude of regulatory reforms around the world, which seem to be a fairly pervasive cause of consternation.

While these changes do pose challenges and can eat up budgets, there can also be a silver lining for those who can offer services to help manage the regulatory needs of others.

“As regulations continue to be implemented by regulators around the world, we need to look at not just the challenges that this brings to all of us, but the opportunities,” says Antonellis. “As an example, the AIFMD (Alternative Investment Fund Managers Directive) regulations created a significant reporting burden for our clients. In response, we developed solutions to simplify and aggregate data to help them meet the new requirements.”

Plus, the roots of the business still exist, he says, and these will continue to serve as the basis of the industry’s ability to move forward.

“Our business is built on three fundamental growth drivers: globalization, regulation and complexity, and retirement savings,” says Antonellis.

“Investments are still moving into emerging markets and developed markets across a changing framework of regulation. And the vast majority of developed and emerging nations are still struggling with the retirement savings needs of their constituencies. The economic crisis slowed economic growth down significantly, but we believe that those fundamental drivers of the investment business worldwide are still in place.”

In addition to these drivers, Antonellis sees the industry as critical for financial markets as a whole. While the challenges are clear, securities services will need to maintain its significance throughout the world in order for markets to function healthily.

“Our business plays a key role in the investment world. We are the infrastructure, if you will, that provides access for our clients into global markets, both emerging and developed. Without confidence in the system of settlement, income repatriation, dividend repayment, safekeeping, etc., you would have a very disjointed global marketplace.”