Research & Thoughts

Transforming Asset Servicing

Done right, Asset Servicing can reduce costs, increase asset value utilisation, improve customer service, customer retention and satisfaction, enhance data quality and availability, and generate additional revenues. Not bad for a function that has, to say the least, been somewhat overlooked until recently.

Change is coming to Asset Servicing
“With the introduction of STP settlement platforms, I expect to see many clients bringing their settlement processes inhouse while they continue to outsource the more risky Asset Servicing function. With this, you will expect greater competition in the AS space. Over time, some players/competitors will close shop, leaving the space for those who are willing and able to invest in product knowledge, top customer delivery, efficient and scalable automation to support consistent top delivery, and service delivery at a lower cost to customers.” – SVP, Asset Servicing, major financial institution

The key drivers of change

Focus on business efficiency and the need to secure optimum return on equity are stimulating investment in renewed approaches to asset servicing.

Fixing the parts doesn’t guarantee the whole will transform
Historically, some progress has been made with individual aspects of asset servicing improvement – better standardisation of event notifications being a good example. But there has been no single strategyled approach. Valuable progress has been made with individual process elements. But they remain ‘scattergun’: individual and tactical upgrades have, inevitably, failed to result in a coherent overall improvement.

Four key factors – cost, risk, opportunity cost and client satisfaction/loyalty – are now especially important in the drive to realise the full potential of asset servicing through transformation:

  1. Cost
  2. Risk
  3. Opportunity cost
  4. Client
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