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D E P T H
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S E L F - S E R V I C I N G ]
D
igital technology is re-writing the
rules on how service providers
interact with their clients across
a range of consumer industries. Suddenly,
the idea of letting the customer do more
in the servicing process is becoming
prevalent, be it self-check-in booths at
the airport or self-check-out counters at
the supermarket. Key functions that were
previously performed by the employees
of an organisation are being replaced with
self-service-enabling technology. This
function meets the most common attrib-
ute required by clients and consumers in
the 21st century: speed.
This model is also creeping into banking
and financial services. As per usual,
retail banking has taken the lead where
technology is enabling customers to
check their own financial statements,
file mortgage or loan applications, find
out their credit score etc., all through an
online portal.
In June last year, PwC published its
annual digital banking consumer survey,
which asked 4,000 consumers how they
think and feel about a variety of differ-
ent banking channels and activities. The
survey found 15% of respondents are now
mobile-dominant with their banking
activities, up from 10% in the same survey
in 2017.
Seeing this progress in the retail bank-
ing and everyday consumer space, it’s
"Banking will become more like an airline
service where you can check in yourself and
drop off your bag, but you would always
have a need for an advisor.”
THOMAS NIELSEN, CHIEF DIGITAL OFFICER, GLOBAL
TRANSACTION BANKING, DEUTSCHE BANK
unsurprising that the self-service model is
being explored by the global custody and
fund services industry.
Do it yourself
Financial services firms are increasingly
implementing digital technologies in
order to automate manual, human-led
processes that have been criticised for be-
ing too error-ridden and costly. The move
towards smart contracts and distribut-
28
Global Custodian
Spring 2019
ed-ledger technology (DLT) has presented a new opportunity
for custodian banks to grant client access to their own data, and
could mean a transition to a self-service relationship.
“With digitisation, we have found the more we can give back
and put in the hands of the client, the better experience they’ll
get,” says Thomas Nielsen, chief digital officer, global transac-
tion banking, Deutsche Bank.
“The development of smart contracts is accelerating this, but
at the end of the day who are you going to trust to validate and
carry out those functions? This is where digitised securities
services firms can remain relevant.”
At its core, self-service is all about taking what a provider previ-
ously performed and having the client achieve the outcome they
want by giving them more control over the process, without the
intervention of human support which could slow things down.
“For a lot of large custodians, a massive percentage of day-
to-day functions are straight through. You have hundreds of
thousands of inquiries that you deal with a month,” says Aaron
Todd, BNY Mellon’s core digitisation leader. “As you increase
automation, you increase self-service. You free up resources that
go to the next incremental value add. That shift is a continual
process to improve efficiency of the organisation and redeploy
resources,”
Todd adds, however, that self-service goes beyond asking the
client to do the custodian’s job for them.
“Self-service is not about taking an internal process and forcing
them [clients] to do that, as populating them with information
and expecting them to regurgitate it doesn’t work well. But
when it is done right, it has become the preferred solution as
people want that access and information directly and immedi-
ately,” he explains.
"In many cases, exposing the information the client would get
by calling in and making the availability of that easier is step one.
The second is getting more proactive data, i.e. warnings, are you
proactively alerting the client? Or give the option to the client to
filter what information they get.”
Data has quickly become one of the most valuable weapons in a
financial firm’s arsenal throughout all manner of operations and
trading decisions. For fund managers, data is needed to enable
more effective fund distribution, accurate regulatory reporting,
portfolio analytics and operational efficiency.
Custodians sit on mountains of data, with access to data across
multiple markets, financial intermediaries and counterparties.
The challenge for them is how to make use of this data and find
a way to monetise it. Solving this puzzle can help them differen-
tiate themselves from their competitors.
Providing tools for clients to access their own data along with
analytics on investment and risk trends can be seen as a first-
step for developing this self-service model, and custodians have
told Global Custodian that they are beginning to invest signifi-
cantly to help build this out.
"There are two key change agents that will drive further pro-
gress in this [self-service] area,” says Pervaiz Panjwani, EMEA
head of custody and fund services, Citi. “One is accessibility
of data, and by this I mean investment in the platform, ease of
access, completeness and quality of the data. This will fast pace