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if data becomes a standalone asset and is a standalone revenue driver , but we have seen that with many conversations , custody and data are often talked about together . When delivering an integrated custody and data service , it allows us to have a distinct product , and makes the data a core part of our asset servicing infrastructure . fragmented way or should you carry out the custody and middle-office functions in one place ? To some extent , there is a first-mover advantage , but it is more about being where the client is , in order to stay ahead of the competition .
GC : What are the benefits to providing an integrated digital assets service in comparison to having an external offering ? RR : The most fundamental aspect of the asset servicing model is the client experience – so when looking at digital assets , clients want to know their assets are looked after and valued in a trusted place . With an integrated digital asset offering , it means clients can work closely with us for custody and then also utilise our capabilities for fund services and securities lending for all assets . We had some client conversations about this before the announcement , but now they know it is real and the quality of the conversations has picked up significantly . We have found clients don ’ t want a parallel infrastructure to manage these assets , so the more integrated it is , the more seamless the service and experience is across their portfolio .
GC : There was also the announcement on the new alliance with Amundi ALTO , which gives you quite an extensive list
of front-office partners . Has BNY Mellon begun seeing the rewards of these alliances ? RR : With the addition of Amundi ALTO , we are now able to offer full coverage to an asset manager . When an asset manager looks to work with us , they want to have access to any OMS provider and seamless front-to-back connectivity , which adds to the improved client experience . Call it best-in-breed or provider choice , with our OMNI platform clients feel we are integrated across the board rather than pushing an end-to-end solution on them . For the clients we are working with , they are getting efficiency in cost , efficient oversight , and better workflow – all creating better opportunities and a better experience .
GC : Last year , BNY ’ s CEO Todd Gibbons mentioned that data services will become an even bigger part of custody deals . Will data management mandates become an even bigger part of the asset servicing business ? RR : I see two types of discussion – one is the combined custody and data service mandate – that is increasing in size – and the other is just a data management RFP . Data is becoming critical for clients – they understand everything is built on this data foundation . Time will tell
GC : Are there any plans to play a larger role in the front-office for asset managers and asset owners , such as outsourced trading or FX dealing ? RR : We have a suite of solutions for the front-office , which includes outsourced trading , transition management etc . Looking at the total wallet of an asset manager , the fund accounting is maybe 5 % of their wallet . If you talk to a client CEO , their mind isn ’ t on the accounting , it is on alpha generation and asset gathering . Overlay that on a world where compliance is more complicated , threats are more diverse with cyber security , and now the pandemic , asset managers understand that unless they can run it in true scale , they shouldn ’ t carry it out themselves . We had seen this in the back- and middle office , and we ’ re now seeing it in the front-office . The goal for us is not to offer it on a standalone basis , but that it is integrated across the board . There is some way to go for a complete front-to-back service and it is probably going to take years to mature , but for us to still be relevant , we need to be there and orchestrate across the value chain , either with ourselves or with partners .
GC : Do you believe the identity of what a custodian bank is will change going forward ? RR : I personally don ’ t like the term custody bank – the foundation is custody but we do a lot more than that . The new identity is being an asset servicer for the entire value chain where you can deliver fantastic scale and efficiency , be agile enough for new asset classes and services , and be absolutely global because clients ’ investment strategies are global . This is not meant to be a sleepy industry . I feel it is a vibrant industry that is generating real value for our clients — which you are seeing with our move to digital assets , our front-office alliances , our distribution analytics , the work we are doing with Microsoft , and being a partner everywhere we need to be .
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