[ U P D AT E ]
JP Morgan
shines spotlight
on securities
services at
investor day
JP Morgan has now moved up to
number two in the global custody
rankings with just under $27
trillion of assets under custody.
J
P Morgan showcased its securities
services business at its annual investor
day meeting, where the bank stressed its
ambitious goals to close the gap between
its two main rivals.
During the presentation, Teresa
Heitsenrether, global head of securities
services for JP Morgan, highlighted how
the business has become one the most
consistently performing units of the US
banking giant.
After achieving $4.1 billion in securities
services revenues last year, the business
has now moved up to number two in the
global custody rankings with just under
$27 trillion of assets under custody, and is
now setting its sights on growing the fund
administration business.
“In fund services, we have made
significant progress in closing the gap
to our top competitors, and are now
a leading provider of accounting and
administration across the full range of
traditional and alternative fund types,”
said Heitsenrether.
Assets under administration (AuA) for JP
Morgan has grown nearly 55% since 2015,
and last year it reached the $500 billion
mark for its alternatives fund services
business.
As well as processing the largest custody
mandate ever – its $1 trillion mandate with
BlackRock – Heitsenrether explained it
did so while also processing several other
16
Global Custodian
30th anniversary 2019
multi-trillion fund services mandates.
“We are currently onboarding additional
multi-trillion of assets from existing
custody clients who are entrusting us with
outsourcing their fund administration for
the first time,” she explained.
Heitsenrether also laid out the blueprint
to achieve further growth, with technology
investment and leveraging the wider
corporate and investment banking
business as the two main pillars of its
strategy.
She explained by combining the two
with a ‘data backbone’, providing a single
channel of data across products, regions
and asset classes, it can now offer an
integrated front-to-back solution for its
asset manager and asset owner clients
across the full investment lifecycle.
“We have adopted an open architecture
approach and have developed direct
integration with a number of client order
management systems (OMS). We are the
only provider to offer fully integrated two
way workflows… updating clients in real-
time and eliminating the need for costly
reconciliations,” she said.
“We are developing our next-gen
strategic middle-office that will go live in
the middle of next year – leveraging the
technology that supports our own trading
desk – and delivering scalable cross-asset
solutions that address the challenges of
legacy lift and drop models.
“Moving up the value chain to investment
process, exploring opportunities by
providing our own data, risk and analytics
capabilities as services to clients. We
recognise the importance of also having
the flexibility to choose from a number
of best of breed providers, so we are
partnering with third parties to give clients
seamless access.”
In addition to JP Morgan, its main rivals
BNY Mellon and State Street, have also
sought to expand with a front-to-back
strategy, as revenue streams from
traditional custody and administration
services continue to be strained by asset
management pressures.
“Our industry is evolving, and the winners
will be those that can deliver end to end
solutions across the investment lifecycle,”
Heitsenrether added.