State Street is entrenched in the immediacy of the world’s financial markets. On any given day, we are safekeeping assets, settling trades, pricing securities, and conducting recordkeeping for institutional investors across the globe.

To effectively serve our clients — including asset managers, pension funds, insurance companies, alternative managers and sovereign wealth funds — we must stand ready with solutions for tomorrow’s challenges. Our global scale, experienced workforce and deep investment insights are the valuable resources clients rely on when they seek to tackle shifting markets, shrinking margins and more complex regulatory systems. Andrew Erickson discusses how clients see State Street as an essential partner, and how that has evolved over the last decade.

What does it mean to be an essential partner to our clients today? In other words, what does it take to deliver the best outcomes for our clients?

A decade ago, the idea of creating a “true partnership” was more aspirational — on both our part and the clients’. Today, clients need us to be a dedicated extension of their team. They want to tap into the benefits of scale that State Street’s partnership-focused approach can deliver. When our clients tell us, “You’re our team on the ground,” it’s the highest compliment we can receive. This partnership ethos used to be a value-add, but now it’s vital for our success.

How can State Street support clients’ growth in an environment of heightened competition, higher regulatory expectations and the absolute need to differentiate?

In all markets, clients want us to be their eyes and ears in terms of new developments and opportunities. They are asking us to offer them insights on market trends and data that they can’t get anywhere else. Ultimately though, they demand solutions that will improve their overall business and investment performance. We believe we can meet those expectations. We pride ourselves on having the platforms and expertise that allows us to deliver a higher-quality solution at scale and at an effective price, helping clients achieve the long-term performance they seek.

What are our competitive advantages when it comes to servicing our client segments? How do we service them differently today than we did in the past?

Our value proposition differs for each of our segments, but there are three common denominators that set us apart: insights, scale and execution.

First, we bring distinct insights to each of our client segments, both from a servicer perspective as well as from the perspective of some of the largest asset owners in the world. Our insights let us look out in the future and make investments in where the business is going. For example, we were ahead of the curve in being able to service exchange traded funds (ETFs). State Street anticipated a need for this product back in 1993 when we launched the first one. Since then, we have aligned our resources and capabilities around the future of the ETF market with new solutions such as the first automated performance and investment analytics service that itemizes a fund’s net asset value, and the first multi-client electronic primary market trading platform in the European ETF market.

Another good example is how State Street’s expertise with regulatory requirements helped us prepare clients for a change in how investment companies report monthly portfolio holdings to the US Securities and Exchange Commission in 2019. Amendments to SEC data modification rules extended the release date of certain types of data and required firms to alter certain record retention protocols. Well before the rules took effect, we worked side-by-side with our clients, listening to their needs and offering our regulatory and technical expertise.

Together, we devised new data collection and reporting solutions that worked with their existing systems and met the SEC’s demands. Together, we reached the best possible outcome.

Second is scale — customized for each segment. Here, our platforms and delivery will be different, but they will all enable operational scale and consistent access to information in every market where our clients are doing business. Years ago, we may have offered a common product for use across client segments. But custody service for an asset owner looks much different than it does for an insurance company. Because of the close partnerships we’ve developed with our client base, today we offer more tailored solution sets for varying client segments.

The third is expertise in execution — we have a very good blend of global, local, and tenured expertise. State Street teams are embedded within each client segment, allowing us to quickly address and implement solutions for our clients’ challenges.

What are some of the changing needs of a pension plan participant or a mutual fund investor, and how do they factor into State Street’s solutions?

Overall there’s a much greater demand for transparency. Today’s mutual fund investors are very savvy about their funds’ underlying fees and the relative performance of their funds. Pension fund investors are posing more questions about their retirement system’s investment choices and the underlying risks and opportunities behind them. Having State Street as a trusted partner gives our clients the ability to present this information in a clear and transparent manner, providing individual investors with a greater level of comfort.

We need to always ensure our clients are keeping up with the times. That means we must be ready to support a range of new investment instruments at our clients’ disposal. Think about complex derivatives used to protect against risk. We want to make sure a pension fund can incorporate that strategy, so we work closely with our clients to provide the right servicing solution for them. Today, we need a breadth of products in a range of geographies.

Speaking of geography, how is State Street supporting clients entering new markets?

We have a team that focuses exclusively on market entry solutions. It works with clients around the world, educating them on the practicalities of entering a new market, setting expectations by offering a realistic timeline as to when they might achieve their expansion goals. We’ve seen numerous cases, too, where a client we service in one location wants to take the same product into another market, and we’re able to provide the benefits of scale to achieve that in a way that is very cost-effective.

Few envisioned the upending turmoil of the COVID-19 global pandemic. How is State Street responding?

The human element to all of this is top of mind, so first, we are making sure our team members and their families are well equipped to deal with this unprecedented crisis. Turning to our clients, we remain focused on helping them run their operations as smoothly and securely as possible with disaster recovery plans in place. State Street’s “follow-the-sun” model has enabled us to shift work between locations, and we’re getting better at that every day. This pandemic revealed how we all need to work together much differently. It would be remiss of us if as a result we didn’t develop better models.

State Street also stepped up to help bring confidence and assurance to investors after liquidity concerns roiled US money market mutual funds in March due to anticipated high redemptions because of the pandemic. We were the first financial institution to participate in the Federal Reserve Bank of Boston’s Money Market Mutual Fund Liquidity Facility (MMLF), a loan program that allowed us to borrow from the Fed and buy qualified money market instruments, guaranteeing a flow of capital into money market funds. It’s not unlike similar actions we took during the 2008-2009 financial crisis, when confidence in the financial system was being tested.

As this historic pandemic plays out, State Street is committed to keeping the lines of communication open — with our employees, our clients, our third-party providers and our communities. This is a time when partners must truly rely upon one another.