Deutsche Bank’s Satvinder Singh referred to the industry’s collective headwinds as the ‘perfect storm’, as some of the world’s biggest securities services firms gathered on stage at Sibos 2015 to discuss how to return to a path of growth.
Discussing global trends in securities markets, Singh highlighted how Deutsche Bank and other securities services firms are targeting growth while staying relevant to clients and secure, amid the storm of regulatory and macro-economic challenges.
“You look at interest rates, you look at margin compression, fee compression, regulation, the impact of disruptive technology, the infrastructure changes. All of that happening at the same time,” said Deutsche Bank’s global head of institutional cash and securities services.
“At the same time the expectation is we will continue to invest in the business, continue to grow. That is the perfect balancing act. How do you move fast enough in a volatile environment, have controls in place not to give up on anything.”
“So what you are putting on the infrastructure side is stability, scalability and then the efficiency around it.”
Singh later added that ‘the days of selling a simple custody solution are long gone’ and other panelists spoke of how they were looking at ways of meeting clients demands while still on the profitability quest.
William Mak, head of Asia Pacific region for Northern Trust, said the Asian market was experiencing the same challenges, however the key area of his the business is increasingly becoming data.
“Whether you can settle the trades quickly, ultimately what is important to our customers is to have very quick information on trade settlements, not only quick but accurate,” he said. “Accuracy and timeliness are two very important factors.
“Because of the challenges Satvinder talked about in the markets, our clients are faced with challenge of low interest rates and need good data to help them manage risk better, to be able to make more informed investment decisions. As a provider this is our focus.”
Jose Placido, global head of client development and strategy at BNP Paribas Securities Services, echoed this, however stated that the industry needs to look at data now as ‘a more interactive matter’.
“We are all used to sending reports a month in, but the world has changed dramatically and having a more interactive platform in order to manage intra-day risk or end of day risk, or weekly, depending on what the client is requiring,” he added.
“If you look at Solvency II, for example we are in a great position to provide reporting for balance sheet efficiency. I think the rules of the game have changed from regulatory compliance to ‘how do I manage my business better?’.”
The other areas for growth and profitability discussed were disruptive technology, more efficient uses of collateral and – in keeping with the theme of Sibos 2015 – collaboration.
Panelists agreed that the industry service providers have had to change their mindset in terms of their offerings and their dealings with each other.
Singh added that he would ‘much rather collaborate and win than lose something’.
Sibos 2015: Securities industry looking for clear skies after ‘perfect storm’
Deutsche Bank’s Satvinder Singh referred to the industry’s collective headwinds as the ‘perfect storm’, as some of the world’s biggest securities services firms gathered on stage at Sibos 2015 to discuss how to return to a path of growth.