00:00:03:13 - 00:00:14:03
James Redgrave: Hello, I'm James Redgrave, vice president of thought leadership and editorial at State Street. And I'm joined today by Chris Rowland, head of custody, digital and fund services at State Street. Chris, thanks for joining me.

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Chris Rowland: Thanks, James. Great to be here.

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James Redgrave: So Chris recently took home the coveted Industry Legend Award at the recent Global Custodian Awards in London, where State Street also won Global Custodian of the Year and Digital Asset Partnership of the year. So Chris, congratulations on your awards.

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Chris Rowland: Thanks so much, James.

Question 1

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James Redgrave: So, Chris, tell us how custody operations have evolved in recent years and how State Street's approach has evolved with them?

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Chris Rowland: So if you look back over the last ten years, custody was starting to be seen as a commoditized service. And really, we've moved on from that and is very much seen as a value add service, and that's really been driven by a couple of key themes. So the first is around digitization of processes and how those digitization of processes have really made a difference to the ability to deliver straight through processing, scale and truly global reach.

00:02:41:15 - 00:02:56:17
Chris Rowland: Underpinning that, you have data and see how data has slowly but surely become really important in terms of the role of the custodian and how we can act as a data consolidator and really get the right information out across the entirety of the ecosystem.

The final area is really around the ecosystem and how people are interacting in the ecosystem. So, traditionally, there was a lack of interoperability within the custody environment. Today, the technology and particularly the interaction with fintechs have made a real difference in to that interoperability and the ability to bring parties together across the chain of custody and actually have been working together on exceptions at the same time, and ensuring that there's a lot more transparency around statuses and then who is basically solving what problems.

Question 2

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James Redgrave: Thanks. And you mentioned the scale or thinking about State Street as a sort of global custodian with operations globally and also a network of some custodian relationships. How important is that sort of local nuance to custody?

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Chris Rowland: So I think, is that the key of how you deliver a really high quality, client centric, services out to clients. So getting that local touch combined with the global capability is absolutely of paramount importance. And one of the things that State Street have been doing is really looking at the operating model that we deploy with our clients and really trying to get that local touch capability, either through our network functions or more importantly, today through the technology we're deploying, which enables us to start thinking about multi-directional interactions with our clients and our agents and us - all in the same environment.

Question 3

02:02:33
James Redgrave: So State Streets Alpha proposition encourages the market to think about various different investment operations, holistically. And our recent data operations survey suggests that the market is increasingly thinking about front office use cases for back office data. How significant do you think that is again, for State Street and also the industry?

Chris Rowland: I think it's fundamental to the way that we run State Street. Think about our value proposition out to our clients, the ability to be able to give our clients good data on a front to back basis is really at the heart of our strategy. What it's meant in the back office is the ability to ensure that all data coming in and the way we capture it is consistent and then is contained within one single environment, which ultimately allows us to then get that data back out into our into our clients.

00:03:17
Chris Rowland: And I think what that survey told us was that clients have historically really thought through this from a front office and middle office perspective, but the role of the back office have become increasingly important to their thought process. And it goes back to what I said in one of the earlier questions, which is how we're interacting across the ecosystem and ensuring that we're connecting data up to what our clients are doing., their activity is being received in a real time basis, and then we also have the response to truly make sure that we don't get questions coming through, through emails and through telephone calls and we're actually far more digitized in the way we're tackling the data question.

Question 4

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James Redgrave: And obviously, today's survey is quite a large, quite a rich survey. Did anything else stand out from the results to you?

Chris Rowland: So the role of the custodian is becoming increasingly important about how our clients are thinking about data. And I think that came out through the 900 people that we interviewed through that process. And they're really saying that the back office is a central part and how are you driving clients satisfaction. So if you can get the right data coming through in a timely basis out to the client base, you can really up the level of client satisfaction and a genuine senior client centricity because you're actually bringing making a more personalized service wrapped around that data and tailored to what the client is actually trying to do.

Question 5

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James Redgrave: And, thinking with your digital hat on now for, for a bit, obviously, you know, we have a Digital Digest publication, coming out shortly in which we take quite a sort of deep look into what institutional grade, digital asset custody looks like. What do you think the role of the traditional custodian bank is in a digital assets ecosystem?

Chris Rowland: So the traditional bank is absolutely going to be critical in the world of digital, of digital custodians as well. So everything that we're seeing today basically brings together the two roles of traditional and digital. Clients want to be able to manage their portfolio as a holistic whole. And typically they're not just going to hold digital assets, they'll be holding both types.

Chris Rowland: And then what we’re then seeing from the engineering perspective is the ability to solution, those two types of assets into the one platform. So if you take a very simple example, like the valuation of a digital asset, you need to be able to capture that digital asset through your existing platform, bring it into your fund accounting platforms, and then apply a specialist digital valuation engine over the top of it to make sure you get the valuation back out. But the client is still wanting to see that in totality in terms of how it's reported. And the same can be true across how you think about tokenized assets in terms of that custody of those assets and the custody platforms, and also in terms of digitization of the of the register of the fund. So to me, traditional and digital come together, they start to really coexist, and the ability of the custodian to be able to support both seamlessly, which becomes really important.

00:05:53
James Redgrave: So, Chris, thanks very much for your time and your insights.

Chris Rowland: Real pleasure. Thank you for having me here today.

James Redgrave: And thank you for watching.