BNY Mellon-BlackRock/Bloomberg alliances
BNY Mellon set a clear strategy at the beginning of the year: to adopt an open architecture model by partnering with the front-office platforms its clients use. This was a clear break away from its main rival, and instead of gaining a front-office service through acquisitions, the custodian decided to strike an alliance with two of the most used buy-side trading platforms.
The project started in April when BNY Mellon struck a landmark partnership with BlackRock, where it would integrate its custody data, accounting and asset servicing tools to the Aladdin platform. BNY Mellon would deliver real-time trade data, asset prices and cash positions to the 40-50 clients it shares with Aladdin.
Then in September, the bank partnered with Bloomberg to combine its custody and fund accounting data with its order management system (OMS) – AIM – enabling buy-side firms to gain direct access to BNY Mellon’s data and analytical workflow tools.
Both moves reflect BNY Mellon’s focus to create a full front-to-back office data service, placing it at the centre of its clients’ investment data flows.
“No two OMS are the same, and no two alliances will be exactly the same, which is why it plays into our open architecture strategy. Clients want freedom of choice – they might find one OMS is more functional or more efficient than the other for a certain asset class – so we will work with them to integrate the data and get the dashboards out to ensure the end client experience is as good as possible,” Hani Kablawi, CEO of global asset servicing at BNY Mellon, told Global Custodian earlier this year.
State Street Alpha
In August, the Boston-based global custodian unveiled the new brand for its front-to-back asset servicing model: State Street Alpha. The service – a combination of its traditional middle- and back-office business and Charles River Development, the front-office solutions provider it acquired for $2.6 billion last year – was rolled out and began winning the favour of asset managers and institutional investors alike.
The State Street Alpha project has been a by-product of its ‘One State Street’ model. At the beginning of the year, State Street’s president and CEO, Ron O’Hanley, explained the expansion in the front-office will give it access to a new $8 billion asset pool at a time where the traditional custody industry is under immense fee and market pressure.
“We can grow faster than the industry overall,” he boldly claimed in an interview with Global Custodian.
He also said the bank had approximately 110 opportunities being pursued by its sales team. Then in June, it announced it had entered into a letter of intent with Lazard Asset Management (LAM) to sign up the firm as a client of State Street Alpha.
“This Alpha strategy is facilitating deeper client relationships, allowing us to increasingly become their essential partner, while delivering operational efficiencies to both our clients and State Street,” O’Hanley said on the bank’s third quarter earnings call.
SS&C Eze Eclipse
Similar to the global custody industry, front-to-back integration has also occurred in the fund administration sector when SS&C Technologies announced its acquisition of Eze Software last year.
Throughout the year, the tech giant underwent a project to combine SS&C GlobeOp with Eze for a combined front-office/fund administration outsourcing platform, aimed at hedge funds and other institutional investors.
In July, SS&C revealed it had signed up more than 70 hedge fund clients to the SS&C Eze Eclipse platform, following a flurry of technological upgrades to the platform to enhance data gathering and reconciliation across the transaction lifecycle.
“Start-up funds tend to run lean, so it’s very important to find partners that you trust and give you the attention that you need. We’ve been extremely pleased with our experience with SS&C Eze, and highly recommend it to other hedge funds,” said Joseph Weiss, co-founder and senior analyst at Natare Capital Management, a user of SS&C Eze Eclipse.
As SS&C continues to roll out more technology solutions, it will look to increasingly marry the Eclipse platform with other flagship services such as Advent and Geneva, its global portfolio management and accounting platforms.