All asset servicing providers are united by one goal: to offer solutions that serve the front, middle, and back-office operations of custodians, writes Nicholas Pratt. In a comprehensive piece on Funds Europe, the operations and technology editor examines the many different approaches taken to achieve this goal, from partnerships with custodians, to full-on acquisitions.
The team players
Asset managers that have chosen to form alliances instead of going down the route of acquisition are recognising that they are not “the only port of call for clients”, says Marc Mallett. The global head of platform strategy for Northern Trust is quoted in the article on Northern Trust’s agreement with investment management solutions provider SimCorp, which was finalised in February this year. He explains that the alliance aims to make it easier for clients to integrate and extract data, given that many of them are already reliant on data from well-established platforms the likes of SimCorp and Bloomberg.
A slightly different tact would be building “an online marketplace or ecosystem where there is a central platform that links to a range of micro-services through APIs or similar technology”, writes Nicholas Pratt. With this approach, “the idea is that the asset servicer acts as a curator of third-party partners as much as a platform”.
The lone wolves
Custodians who are willing to get a lot more involved may opt for acquisitions, as State Street has done with order management systems provider Charles River. Cuan Coulter, executive vice president and UK country Head of State Street, is of the opinion that acquisition is the “best” way to achieve the single, integrated front-to-back platform that State Street wants to offer its clients. “We felt it was important to do what we said on the tin,” he explains. This also avoids the alternative: forming multiple alliances with different service providers, which he doubts is “really simplifying” the operating model.
Perhaps the most involved, however, are asset managers such as Amundi and BlackRock. These firms have built their own tech platforms, which they can offer to other asset managers, “enabling another way for firms to forge links to the systems of asset servicers”.