Data, a major driver of the transformation of the Custodian business

09/02/2021

Following a year marked by the pandemic, the resilience of our value chains and an acceleration in our businesses’ digital transformation, there are numerous prospects for asset management and the custodian profession in 2021. Societe Generale Securities Services (SGSS) has a solution offer and a Data access environment providing an extensive range of services in its custodian business.

The 2020 crisis proved to be an accelerator of the thought process for everyone regarding the transformation of our organisations and economic models. The change has not bypassed the custodian business, far from it. It has to continually adapt to an ever-changing regulatory framework.

But, beyond these regulatory aspects, it is more in the area of professional practices that we are seeing the biggest change: we now provide more in-depth and instantaneous information, and provide investors with better visibility on the European market, on more asset classes. Taking action before the cut-off, having details of volumes or thresholds on orders placed, forces the custodian to move to real time and consider their control business with a greater degree of responsiveness. And to inform their clients, using new communication channels that are considerably more efficient than emails. And the extreme level of market volatility at the start of the lockdown brought about new requirements that henceforth have to be met in order to bridge the gap between the best-performing funds and the market average.

SG Markets, a technical and functional platform serving the financial markets

The availability of information almost in real time, the ability to automatically generate alerts or comments in natural language, the consolidation of data from multiple sources… these are all challenges the custodian has to meet if they want to transform the client experience, at the heart of recent digital transformations. Technically, we have moved from the report sent at the end of the day to consolidate environments, generating dashboards on the fly, and pertaining to data inventories, offering greater historical depth. This is what SG Markets, the platform proposed by SGSS, allows, providing all of the custodian’s services via a single access point.

Artificial Intelligence, fuelled by Big Data, is establishing itself as an essential component for the creation of value

Having high-quality consolidated data and optimally using it: that is where Artificial Intelligence (AI) now intervenes in our professions. For a long time, Data Science was seen as an R&D1 domain for trading activity.  Today, it is incorporated in all value chains, including the custodian’s value chain: ensuring the reliability of the data that is essential for custodian control; in the management of fund documents, in the verification of contracts, in the onboarding of clients and KYC2.

A new generation of bankers is coming, making optimal use of data, working in agile mode to create more efficient models. The boundaries of our companies are shifting, integrating new partners such as fintechs (generation of comments in natural language), in order to co-develop in dedicated spaces (such as LePlateau in Luxembourg), and to incubate startups (like FORGE, on the Blockchain and the issuing of funds in digital currencies). Decompartmentalising is a necessary prerequisite for exploiting data and producing analytics in an automated and efficient way. Doing everything on your own is a thing of the past; it’s now about developing new partnerships, but also about incorporating new services in our platform and making them available via APIs3 in our clients’ tools. It is in this Open Architecture rationale that IT can benefit asset management.

SGSS, a Pan-European organisation serving asset management companies

At SGSS, we have put the “digital” client at the heart of our strategy: develop turnkey services adapted to the needs of each client, develop an “end-to-end” service to cover all or part of the value chain, strengthen client autonomy by providing them with all the elements they require so they can focus their energy where they create the most value. Data lies at the very heart of this transformation, but it must be consolidated, and its reliability ensured, in more modern formats and presentations, to meet the market’s new requirements. SGSS has taken this step to be ready to provide this service.

Article published in Option Finance on 15th january 2021


1 R&D = Research and Development

2 KYC = Know Your Customer

3 API = Application Programming Interface

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