JP Morgan is making a push to expand its middle-office capabilities for buy-side clients by utilising the technology platform from its own trading desks uses.
The New York-based global custodian will leverage its industry-leading technology to enhance services such as trade processing, lifecycle and collateral management for a wide range of asset classes, with the aim to outcompete other global custodian’s that do not have an investment banking franchise.
“Our middle-office services are leveraging a lot of the technology we use in the investment bank and our own trading desks, enabling us to be able to build and offer, what we call, our ‘Strategic Middle Office’ capabilities,” Teresa Heitsenrether, global head of securities services at JP Morgan, told Global Custodian.
JP Morgan’s strategy reflects increasing demands from asset managers to outsource their middle-office functions as a result on fee and operating pressures.
Expanding its middle-office capabilities has been a strategic focus for JP Morgan’s custody and fund services business for a number of years.
Daniel Pinto, head of JP Morgan’s corporate and investment banking business, previously highlighted the need to overcome middle-office inefficiencies. The bank has also partnered with post-trade technology firm Arcesium to use its middle- and back-office software to support their fund administration platform.
JP Morgan’s custody business is also making frequent use of the technology used by the bank’s investment banking division for other post-trade services.
Most recently, it opened its internal trading and risk management platform, Athena, to more than 200 large custody and fund services clients on a post-trade basis, allowing them to gain clearer insights into their own portfolios.
Heitsenrether added the bank is underway with onboarding its first mandate for the new middle-office infrastructure.
“We are working with a client today as the first mandate for this infrastructure, and there is also a lot of interest in the pipeline to get up and running on this. That is well underway,” she added.
“The ability to leverage the investment bank is very unique in the industry, as we can tap into abilities that a standalone custodian could never build.”
Earlier this year, Northern Trust announced it has integrated its middle-office technology with a number of trading platforms, including Bloomberg AIM, in order to support the trading and middle-office needs of global asset managers and asset owners.
The full interview with Teresa Heitsenrether, global head of securities services at JP Morgan, will be published in Global Custodian’s Summer Issue. To ensure you’ll receive a copy, subscribe to Global Custodian today.