Asset servicing firms have always invested a mind-boggling amount of money into technology. Their big institutional investor clients have not always appreciated that time and money, though, it has to be said. But in the past two-three years, the interests of both clients and their big custodians have become more aligned.
The experience of BNP Paribas Securities Services, a division of the oldest foreign bank to have gained residency in Australia –almost 140 years ago – is interesting for super funds to understand, as it is for other service providers trying to gain the custom of those funds. Technology is very important, but it is not the sole driver of service to super funds.
According to David Braga, the head of BNP Paribas Securities Services in Australia and New Zealand (BNP Paribas is the most influential custodian in New Zealand), the partnerships culture is most suited to the new world of asset servicing. Fund managers tend to be driven by distribution. Funds, particularly the big not-for-profit ones, tend to be driven by efficiency. BNP Paribas, Braga says, is all about improving efficiency. “It’s actually about complexity,” he says. “We are working with an increasingly complex environment across the whole eco-system… We are working with OneVue for unit registry – in fact we were their first client. OneVue is the best third-party registry provider in Australia, by a wide margin”.
Braga says that the way the investment world is developing is all about ‘partnerships’. BNP Paribas, for instance, has genuine partnerships not only with OneVue, but also with the blockchain provider to the ASX, Digital Asset. There is also a recently developed partnership with AssetMetrix , which provides analytics for private equity and private debt. BNP Paribas has taken an equity stake in AssetMetrix.
“In the past,” Braga says, “We have looked to see how we can hold it all together ourselves. Now, we have evolved to how we can use all the best providers from around the world to enhance our services… I like to use the metaphor of the smart phone: they have all the apps that you want to use.”
The other area which BNP Paribas is focusing on is the area of data. Braga says the reason his firm talks about it a lot is that it’s an outworking of the issue of complexity. “What we’re looking into is how we use our modern tools to help our clients to enhance their assessments of their portfolios… We want to give them the best-possible data to make the best-possible decisions,” he says.
Braga believes that BNP Paribas needs to invest as much into the development of its people as it does in its technology. “We have a strong sense of purpose about what we do,” he says. “Often our industry is talked about as being the hidden infrastructure of financial services. I look at that as a positive. Everything we do is trusted and relied upon”.