Citisoft's Tom Secaur was recently featured in Global Custodian to comment on the State Street CFO's recent announcement that it needs $1.5T to grow amidst fee pressure and market challenges.
Tom Secaur commented on the current environment custodians face: “We have seen [them]...getting squeezed in commoditized/outsourced services—the quicker that function gets labelled a commoditized function, that invites additional fee pressure. We have also seen an increase in RFPs with many of the largest asset managers to avoid concentration risk and hoping to get cheaper services.”
State Street may combat increasing fee pressure in fund accounting, global custody, and other areas by leaning more heavily on its Alpha mandates to achieve desired business growth.
“Where we see an opportunity for custodians are in those middle office functions that creeping into the front office. The front-to-back service model is harder to benchmark and is not as mature, which means they should be able to charge a more competitive fee for those functions. Those businesses are where the revenue should drive them up,” Tom said.
For more on this discussion, read the full article here.
