[ S U R V E Y
|
A G E N T
B A N K S
I N
M A J O R
M A R K E T S ]
United States
BNP Paribas Securities Services
In 2012 the French bank made a bold move for a sub-custodi-
an servicing American global custodians. It launched a direct
custody and clearing operation to look after the domestic assets
of foreign banks and brokers in the United States. Judging by
these results and those of 2016 and 2017 – it top-scored in both
years – the move has fulfilled the expectations of its progeni-
tors. BNP Paribas has won some large mandates and introduced
an integrated brokerage and custody service that has gained a
following. The scoring of RMs, a useful proxy for what clients
really think, is outstanding. The bank has an edge in blockchain,
AI, robotics, Big Data and cyber-security that the scores for
innovation and data security record. Client service and tech-
nology were obviously affected by a problematic upgrade at the
turn of the year. Respondents would like BNP Paribas to pass on
as price cuts any savings it makes. Corporate actions and proxy
voting are problematic here, as they are everywhere. In cash and
FX, there are issues, but mainly of choice rather than competi-
tiveness or transparency. Importantly, BNP Paribas here share
the universal disappointment at the inability of custodians to
take their capital and collateral costs seriously.
Brown Brothers Harriman
The doyen of this market attracts fewer respondents than of old,
but it is still getting the human side right, even if the averages do
not bear this out on all points. “Great support from the relation-
ship and client services team,” writes a respondent. A firm that
has always seen technology as crucial to its ability to compete
will be pleased to out-perform the benchmarks for innovation
and technology. BBH under-performs in unexpected (account
management) as well as expected areas (corporate actions, cash
and FX), but clients do at least appreciate the risk-reducing
properties of a conservative balance sheet.
BNY Mellon
This is a performance that will disappoint. Respondents find the
bank makes it relatively easy to open an account, and they are
confident it can settle trades into the account and safekeep the
assets once they are there. But they show little no confidence in
the ability of the bank to service the assets with flair, or finance
them efficiently, and they want more choice and fuller disclo-
sure when it comes to cash management and FX execution.
Respondents also have nothing flattering to say about the level
and structure of the prices charged.
Citi
The settlement service and the technology scores are as strong
here anywhere, and respondents are confident that Citi can
protect their cash and securities, from regulators as well as other
forms of risk. But it is hard to identify other areas of strength.
J.P. Morgan
The bank attracted enough responses to warrant an assessment.
The responses it received include some surprising findings
about client attitudes, especially in asset safety.
WEIGHTED AVERAGE SCORES
BNP Paribas Brown Brothers
Harriman BNY Mellon Citi J.P. Morgan
Market share (% of responses) 36% 16% 24% 16% 7%
Relationship management 6.14 5.04 4.54 4.94 Client service 5.22 5.49 4.96 Account management 5.37 4.60 5.44 Asset safety 5.90 6.00 Risk management 5.28 6.12 Liquidity management 5.44 Regulation and compliance 5.88 Innovation Asset servicing Market Average Global Average
5.63 5.22 5.20
5.00 4.70 5.12 5.40
5.02 6.07 5.18 5.44
5.62 5.26 5.06 5.47 5.68
4.76 5.21 6.05 5.52 5.46
4.65 4.05 4.09 4.88 4.70 4.89
5.83 5.09 5.60 5.89 5.53 5.64
5.89 5.34 4.77 5.33 5.63 5.30 5.18
5.31 5.43 4.68 4.79 6.00 5.05 5.09
Pricing 4.99 5.33 4.14 4.61 6.00 4.76 4.82
Technology 5.21 5.58 4.78 5.08 4.63 5.19 5.28
Cash management and FX 5.05 4.68 2.91 3.74 6.00 4.05 4.25
Total 5.50 5.35 4.69 4.94 5.54 5.15 5.24
100
Global Custodian
Fall 2018