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Belgium
BNP Paribas Securities Services
The French bank is well-entrenched in Belgium. It services
domestic global custody clients as well as foreign sub-custody
and clearing customers and divides the work between local op-
erations and its hubs elsewhere in Europe. The sizeable number
of inbound respondents that have assessed the bank are pleased
with the people, the relationship and the risk, but are clearly
looking for economies. This is not surprising. Two years have
elapsed since Euroclear Belgium migrated to the TARGET2-Se-
curities (T2S) settlement platform operated by the European
Central Bank (ECB), but the details of the scoring of the major
European direct custody and clearing network in this market
suggests the anticipated savings in cross-border settlement costs
have yet to materialise here. Nor, judging by these scores, are
custodians yet delivering the improvements to the management
of liquidity and collateral that were promised at the advent of
T2S – in short, reductions in the amount of cash and collateral
required to settle trades – despite the introduction of a single
cash account spanning multiple markets and an automated
collateralisation service.
Deutsche Bank
A relatively small number of clients pass a less-than-stellar
verdict on the local performance of the German bank. But local
perceptions matter less than the client experience of the wider
European custody platform Deutsche developed as markets in
Europe migrated to the T2S settlement platform. Deutsche Bank
was among the first to adapt its operating model to the new dis-
pensation created by the phased transition to T2S, joining forces
with Euroclear France to pioneer for a major global custodian an
innovative solution to the post-T2S problem of the disjunction
between settlement and asset servicing. The detailed scores for
Belgium suggest that, whatever T2S has added in terms of settle-
ment efficiency, the new European custody platform has not yet
translated into lower settlement costs or savings in capital and
collateral. It has also added nothing in asset servicing.
KBC Securities Services
In the core services of managing accounts, setting trades and
servicing assets, KBC is keeping clients happy. The small number
that have contributed to the survey also like KBC as a counterpar-
ty, though they think it could do more to help on the price of cash
and collateral as well as the services themselves. On the human
side, they are less gruntled. “Always helpful when contacted,”
writes one client, but the score for client service is respectable
rather than resplendent, and a second respondent is dismayed to
have had “hardly any contact.” A third is more specific. “Respons-
es are sometimes not deeply investigated and out of scope,” writes
a respondent. “Response time is high and reactivity not so high.”
Technology and innovation are clearly issues. However, having
functioned for several years as the independent brokerage arm of
the Flemish bank, KBC Securities Services was from this summer
integrated with the wider investment bank, giving the custody
and clearing group access to additional technological resources as
well as offering clients potential synergies.
WEIGHTED AVERAGE SCORES
BNP Paribas Deutsche Bank KBC Securities Services
Market Average Global Average
Market share (% of responses) 68% 18% 14%
Relationship management 5.50 5.04 5.56 5.43 5.20
Client service 5.66 Account management 5.42 4.64 5.75 5.51 5.40
5.17 6.48 5.54 5.44
Asset safety Risk management 5.42 5.81 6.71 5.68 5.68
5.52 6.01 5.39 5.56 5.46
Liquidity management 4.94 6.25 5.68 5.16 4.89
Regulation and compliance 5.62 5.24 6.18 5.62 5.64
Innovation 5.60 4.25 5.61 5.41 5.18
Asset servicing 4.98 5.21 5.90 5.16 5.09
Pricing 4.91 4.34 5.18 4.93 4.82
Technology 5.31 5.52 5.09 5.30 5.28
Cash management and FX 4.10 5.55 4.00 4.15 4.25
Total 5.26 5.23 5.70 5.32 5.24
Fall 2018
globalcustodian.com
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