Societe Generale Securities Services' three bets during pandemic
Over the last few months, pandemic posed severe challenges to the financial sector and the securities niche could not be an exception. On the one hand, intermediaries have had to rely increasingly on technology, realizing investments to strengthen the digital channel and extract value from data.
On the other, compliance and regulation, albeit increasingly pervasive for some time, have raised new issues to which the sector has been called upon to respond. Finally, the rapid evolution of the asset management has created new opportunities, starting with the outsourcing of many activities by national and international players.
This is a well-known context to Roberto Pecora who at the very beginning of this complicated 2020 took the lead of Societe Generale Securities Services in Italy as CEO. Today SGSS ranks among the top 10 global custodians worldwide and 2nd in Europe with € 4,284 billion of assets under custody. The institution (4,000 employees, of which 500 in Italy) offers custody & trustee services to 3,285 funds and the valuation of 4,126 funds, representing assets under administration of EUR 631* billion.
SGSS operates within an industry today at the center of some global trends that are influencing our strategy.
"First, there is a technological evolution, which requires heavy investments to respond to the competition and to better serve clients. Just think of the new tools allowing an increasingly granular analysis of the data flows that come to us from clients. Today it is possible to extract valuable information from these data to support their risk analysis and control choices. A second aspect to be monitored is the growing regulatory pressure, a trend characterizing the entire financial industry. In this context, our support will be increasingly strategic to respond to the new regulatory requirements. It is not just a matter of responding promptly to the new legislation with compliant products and services, but rather of identifying with one's clients by intercepting their needs.
We are also active in working groups at a European level, thus allowing us to offer clients reliable products and ongoing support during the regulatory compliance phase".
A third aspect on which the company's attention is focused is outsourcing, especially for trading and middle-back office functions. Today, many intermediaries need to reduce their costs by outsourcing some functions to specialized providers. SGSS is a natural candidate for these activities. There are many potential areas of intervention, as Pecora makes clear.
I am also thinking about the distribution of foreign funds in Italy and our recent agreement with MFEX on global fund trading at a European level for institutional clients, concludes the banker.
The set of services offered by the custodian bank represents the fulcrum of the change affecting the financial world today. After all, the global health emergency made the role of value-added services provider and outsourcer becoming increasingly important for SGSS, “especially in terms of operational efficiency and cost containment for assets managers and asset owners”, points out Pecora. “This is demonstrated also by a survey conducted at European level by SGSS on asset manager clients during the lockdown. The survey analyzes the needs of asset managers and focuses on the guidelines for future growth”, concludes the banker.
Article published in Milano Finanza on 17 October, 2020: interview with Roberto Pecora.