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Interview: Jeff Conway, State Street

20 December 2016

Jeff Conway, CEO of State Street for EMEA, speaks to Alastair O’Dell in his first major interview since returning to the region about how technology is transforming custody and fund services

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It has been 18 months since Jeff Conway returned to the UK after a decade in his native US and is now firmly settled into his role of CEO of EMEA, with regional responsibility for the Global Services, Global Markets and Global Exchange businesses.

He has brought back a zeal for technology and is leading a root-and-branch overhaul of business processes. Europe has not, in the meantime, had a stellar year. Brexit and market turbulence have only added to the daunting prospect of complying with an unceasing barrage of compliance demands.

"Our clients need us now more than they ever have. We need to be relentless in our ability to deliver for them."

To "relentlessly deliver" is a phrase that Conway repeats during the interview, describing the need for his business to support clients in increasingly challenging times. Testing for sure, but also circumstances where the best prepared can pull out an advantage.

Not every industry trend or regulatory change will benefit State Street but Conway takes the view that there is now no point fighting the inevitable and effort is best spent getting ahead of the curve.

"Just accept it – regulation is not going to go away. We have our own regulatory requirements but our clients have their own and we need to help them. I looked at the level of demand that our customers were looking to from us – and it continues to be quite high."

Strategic direction

There is an array of possible strategic directions for the truly global custodian banks. Primarily due to regulation, there are unresolved questions of what is required of trust banks, new opportunities left by investment banks curtailed by capital constraints and areas where clients need additional support.

"Where there is confusion, there are real opportunities," he says. "On the back of market change there is opportunity for us to introduce a new set of capabilities. Our ability to position the organisation while remaining nimble enough in areas of change is going to put us in a good place."

For example, State Street’s enhanced custody product was launched as a result of regulatory constraints hitting prime brokers. Enhanced custody, run by Alex Lawton’s team for EMEA from London, provides short supply to the market alongside (rather than competing with) prime brokers, many of which are constrained by Basel III and would perhaps rather concentrate on activities attracting less capital cost and greater revenue.

Waiting for certainty before starting the development process would mean products would not be ready when clients’ needs arise. 

"We are going to have to take some bets – for lack of a better word – in advancing new innovative solutions. It isn’t always going to be a clear path. But if we are smart about how the regulatory environment is driving the market then we can take some new product bets."

Data deluge

The complexity and frequency of regulatory reporting requirements has stoked demand for powerful data solutions. State Street is certainly not alone creating products to streamline vast amounts of data but Conway says that State Street Global Exchange is "doubling-down" on its solution.

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