Global Custodian Securities@Sibos 2019 - Page 20

[ D ATA ] The big data product Custodians have access to data across multiple markets and intermediaries, along with an understanding of regula- tions and local requirements throughout their networks. “Big data analytics is one of the major products we are looking at, given the vast repository of information and data that we currently hold,” explains Patrick Colle, general manager at BNP Paribas Securities Services. “By making sense of this dematerialised data, and reporting the key findings back to clients, providers can increasingly reposition themselves as data custodians.” Custodians are confident they will be able to provide asset manager and inves- the custodian sits in the value chain, our institutional clients are looking to their custodians to help them generate both investment alpha and operational alpha. In essence, it is now the custodians’ job to enable clients to have better and more effective access to their own data,” says David Brent, global head of technology sales, investor services at JP Morgan. One client, speaking at The Network Forum in Vienna back in June 2018, ac- knowledged the historic custody model of asset safekeeping, settlements and corpo- rate actions processing and the provision of tax services was irrevocably broken, adding there was presently a race to zero on fees, which was not sustainable. The client however, confirmed that he “I believe custodians should absolutely be would be willing to exploring big data, but the most interesting purchase data an- alytics from custo- use cases might not be stand-alone data dians provided the products for the broader market.” information was MATTHIAS VOELKEL, MCKINSEY useful, and con- tributes to tangible alpha generation or tor clients with invaluable analytics on in- improved risk mitigation. vestment/ market and risk trends, helping Monetising data: A false dawn? customers generate alpha and safeguard Not everyone is convinced big data can be their businesses. effectively monetised. Critics say many “When considering big data and where 20 Securities@Sibos January 2019 custodians have similar geographical, client and product footprints, suggesting the analytics – at least on the investment side – are not going to reveal anything particularly noteworthy. The investment analytics market is also somewhat saturated, while a number of buy-side firms are scaling back on broker- age research and moving to execution-on- ly relationships because of the MiFID II inducement ban. This could make data analytics a tough sell for custodians. The cost of mining data and investing in the necessary technologies to aggregate it all will not be trivial either. Just like any product – if custodians want clients to buy their investment or risk analytics, the data needs to be truly exceptional, and significantly different from what a lot of the brokerage community and other technology providers are offering. Daron Pearce, EMEA CEO for asset servicing at BNY Mellon, says custodians are not trying to replicate the investment analysis provided by brokers. “Our objec- tive is not to tell managers which stock, asset classes or countries they should be investing in,” he says. Instead, it is to provide an up-to-date, real-time view of portfolio performance and risk character- istics drawn from quality data pulled from across the globe and including alternative