In this period of uncertainty across the banking sector, certain key practices will keep securities services thriving. Janet Du Chenne speaks to Satvinder Singh, Head of Global Securities Services (GSS), Global Transaction Banking at Deutsche Bank, about maintaining the client focus
While the perfect storm continues to engulf the securities industry, Deutsche Bank’s Global Transaction Banking (GTB) arm remains firmly anchored, growing from strength to strength. The business continues to invest, and new ways of managing client relationships have evolved to meet the challenges clients face.
All the while, securities industry regulations are morphing within an uncertain geopolitical and macroeconomic environment. “Given the uncertainty and volatility in the operating environment, it is very important for us to keep engaging with our clients on how we can help them adapt to the changes,” says Satvinder Singh, Head of Global Securities Services (GSS) within Deutsche Bank’s GTB business.
Feedback to this approach has been positive. Clients appreciate what GTB brings to the table and they are keen to do more with the Bank, says Singh. The recent integration of GTB with the Corporate and Investment Banking business makes the ‘more’ possible, but the bank’s approach goes beyond cross-sell opportunities. “This is about positioning Deutsche Bank as a trusted advisor to our clients and enhancing its ability to ‘deliver the whole bank’ to meet their needs,” says Singh. “That said, we are sharpening our focus on client relationships, which enables us to concentrate on the revenue, countries and products we want.”
This sharper focus has also prompted the bank’s review of high-risk markets and certain client groups. “While this may mean fewer clients, it will mean the right clients,” adds Singh. “This approach, combined with driving compliance, governance and robust operational controls, allows us to truly focus on ‘compliant revenues’.”
Several unprecedented regulatory initiatives will likely dominate clients’ agendas in the next 12 months. The Foreign Account Tax Compliance Act, the Volcker Rule, the Alternative Investment Fund Managers Directive and the TARGET2-Securities initiative are all coming into effect, driving structural change among industry participants in order to comply.
“What impact the overlapping requirements of these initiatives will have is uncertain,” says Singh. “But the industry landscape will continue to be shaped by the ability of market players to adapt as they re-evaluate their needs and business models over the next 12 months.”
As competitiveness in the industry changes, there will be new and different conversations between clients and service providers. This beckons service providers to move from a one-size-fits-all approach to a more client-focused way of doing things, where they partner with clients on solutions that best suit their needs. “This shift in our industry has led us to adopt a more client-centric approach – listening to what clients need, engaging them and collaborating on how we can help,” says Singh.
“Clients want long-term solutions for the future to address regulatory change, and they have therefore adopted strong solutions-oriented approaches that best meet their needs and help them navigate the changes.” Specifically, regulations aimed at protecting investors, as well as the complexity of international business, imply that clients increasingly need multi-market end-to-end solutions.
“Additionally, we should work together with other providers and infrastructures towards greater efficiencies in the post-trade segment,” says Singh.
Commitment to the cause
Deutsche Bank’s commitment to Transaction Banking was reinforced by CEO John Cryan, who referred to GTB as the “backbone of Deutsche Bank”. This commitment not only covers clients but also includes further investment in GTB’s technology. And the corporate/investment banking integration enables an even easier connectivity across the Bank, allowing a client coverage to be truly joined up.
“We are now easier to navigate and simpler to get,” says Singh. “Due to our strong network in the developed markets of both the USA and Europe, as well as a strong local presence in Asian markets, Deutsche Bank can partner with clients to power the flow of global capital.”
The commitment to investing in technology will also help GTB respond to regulatory trends. Singh describes GSS as an intrinsically technology-driven business, with specific value-added services layered on top. “Given the nature of the business, there are some themes that will shape the digitisation agenda,” he says.
“The bank is giving clients a chance to cherry-pick services to suit their evolving buying behaviour, which in turn brings opportunities for us to improve our delivery model, allowing us to provide best-in-class services.
“In essence,” says Singh, “we are maintaining our ability to operate in an open-architecture fashion, which provides clients with a plug-and-play service model and a choice of services. We also continue to invest in front-to-back automation, reducing operational risk, service turnaround times, and the cost to serve clients.”
As the industry draws near to the eye of the storm, the three principles of client centricity, investing in technology and commitment to the business will steer the success of Deutsche Bank’s GTB and the wider securities services industry towards clearer skies.
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