[ 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