With presence in over 30 countries, State Street Corporation automates processes and integrates global platforms that help clients get real-time access to a full range of risk management,.
Emerging technologies like machine learning and artificial intelligence, along with human intervention have transformed the banking, financial services, and insurance (BFSI) industry, said Andrew Erickson, Executive Vice President of State Street Corporation and Head of Global Services.
State Street, a 225-year-old US company provides financial services to institutional investors, including investment servicing, management, research and trading.
With presence in over 30 countries, including India, State Street automates processes and integrates global platforms which helps clients get real-time access to a full range of risk management, better infrastructure, investment performance and compliance activities.
In an interview with Moneycontrol, Erickson spoke about how Blockchain has the potential to make a real change and enhance financial processes. Edited Excerpts:
Q. How do you see technology changing the finance industry – both within the institutional banking sector and the financial sector more broadly?
A. The current climate makes customers demand highly customised services and they to manage their finances and investments as conveniently as other aspects of life. Real-time information and easy access to sophisticated analytics is something that clients across geographies look for to stay ahead in the game.
There are a couple of key aspects where technology plays a key role. Transparency allows for speedy execution and quick understanding of aspects such as underlying costs and the investments that are being made.
It is transforming portability where financial services can be accessed universally, from any source be it PC or mobile.
The last aspect that technology has impacted is the way information is being used to help drive the financial industry. Companies that are distributing financial services products, choose and identify those customers and leverage technology for their investments.
Q. Artificial intelligence and machine learning are transforming almost every sector. Tell us about how these technologies are changing the banking, financial services, and insurance (BFSI) industry?
A. AI is changing the industry, especially in conjunction with other technologies such as cloud computing, machine learning, data analytics and data processing. It has eliminated repetitive processes that were previously done manually and is automating the entire process by simply removing any inefficiencies that the system might have and connect them together.
We need AI to look through data and the underlying records we possess to identify unique insights which we would not be able to without technological intervention, thereby enhancing client solutions and reinventing their value proposition.
Q. What opportunity does blockchain present?
A. Blockchain has the potential to make a real change to our industry and enhance financial processes. When we talk about blockchain, we are really talking about distributed ledger technology, which is like blockchain, but is not bitcoin.
The financial services industry utilises existing information, applies a process to it and eventually devices its own new set of numbers. The challenge here is that the numbers always need to add up. This is where distributed ledger technology comes in where it gives us the opportunity to augment that data rather than make changes to it and ensure timely intervention.
Q. How can we make sure we are applying distributed ledger technology in the right way? Also, what is the quality of blockchain talent in India right now?
A. When we look at distributed ledger technology and how we plan to apply it, we definitely see India as one of those critical places where we are going to be acquiring that talent to help drive our business. We are attracted to India by the quality of the workforce and the high caliber of well-educated candidates available.
Q. Do employees in India assist you with your global clients?
A. Yes absolutely. State Street has been associated with India for well over 10 years and we are very happy with the progress we have made with our India footprint. For us, it’s a key part of our strategy going forward for how we develop our company and we view it as a talent hub that will enable us to scale, whether it's from a technology perspective, shared services or even my business of servicing clients globally. We consider India to be a key part in helping us achieve our strategic goals.
Q. What is the kind of geographical spread of your clients?
A. We are in over 30 countries. We service them from all over the world.
Q. In the asset servicing industry, what are the broader trends you are seeing? What are your clients i.e. institutional investors interested in?
A. There are a couple of trends that we are witnessing in the global services industry: The increasing transparency which includes transparency around costs where regulators are forcing financial services companies to be more transparent about how they charge people.
Data – It is recognized almost by everyone as a key valuable asset from which we can draw insights to grow client business and propel their strategies and we see that across the board, when it comes to data, people have been trying to do that by themselves, maybe with the help of some external firms.Focusing on the best offering- We are seeing our client base focus more on areas where they can see that they provide more value. So in a challenging market, when the need to differentiate from competition becomes criteria, the best way is to work on the best offering and stop doing things that are mediocre in comparison. We are seeing that companies- whether it’s because of competition or pricing pressure, are getting more sophisticated and focusing on what they do best.