Driving alpha through data
As winners of Asia Asset Management’s Best of the Best 2023 awards for Best Global Custodian in Asia Pacific (20 years), Best Middle and Back Office Services Provider, Best Securities Financing House, State Street is helping its clients leverage their data to gain insights and enhance their performance as part of its data platform and data service offering. Under the Charles River Development brand, the firm was also awarded the title of Best Investment Management Technology Provider.
State Street Alpha is the industry’s first front-to-back asset servicing platform where institutional investors can access aggregated data, analytics and real-time insights easily.
The company believes the next-generation platform, which incorporates the latest technology and builds on the experience it gained through creating and operating DataGX, gives clients end-to-end value creation of at least 15 percent.
The open architecture platform is cloud-native, enabling it to connect to other cloud-based software through the Snowflake Data Marketplace. State Street also has partnerships with other third party data providers, including MSCI, FactSet and RIMES, to provide additional services to clients using State Street Alpha.
“We have a fully integrated and interoperable operating model and we will continue to improve and expand the offering, including integrating third-party software and services to clients,” says Mostapha Tahiri, Asia Pacific CEO at State Street.
He adds that more and more clients are coming to State Street for its data, front and middle office servicing, and custody offering, as its Alpha Data Platform removes a huge amount of the complexity they face in managing and gaining insights from their data.
State Street Alpha integrates public and private asset data on a single platform. “We aggregate information across all assets allowing clients to have audited, organised, ready to use information for their own needs,” Tahiri says.
He explains that because clients’ full portfolio is integrated, the company can provide additional services, such as risk analytics, Environmental Social and Governance analytics, or portfolio analysis by geography, sector or strategy. For asset owners, portfolios are consolidated across all fund managers, integrating clients’ entire investment book, and giving them a complete view of their exposure the day after they make an order.
Ongoing innovation
State Street’s innovation does not end with its data management offerings, and it is also harnessing artificial intelligence and machine learning to continually enhance its middle and back office solutions for clients.
One of its recent innovations is the development of a ‘driverless’ net asset value (NAV) initiative, under which it uses machine learning to automate the end-to-end NAV calculation and reporting process. “In our business, when you have scale, you have a lot of use cases, and when you have a lot of use cases, your machine learning gets better,” Tahiri says.
Meanwhile, through State Street Associates, the company’s academic partnerships and data science hub, it works with academics to use its proprietary data to generate insights it can share with clients.
One of these programmes has involved collecting real-time information on online goods in 25 economies to create its own inflation index based on real-time online prices. “In the past year everyone has wanted this information and we send it to clients regularly. Working with academics helps us define market insights using data we have at State Street, helping clients’ decision making process and analysis of markets,” Tahiri explains.
State Street, which has US$37.6 trillion assets under custody or administration – the equivalent of more than 10% of all assets under management in the world, has a strong commitment to supporting clients in APAC. It has been in the region for over 40 years and has 14,500 employees based there. APAC is currently State Street’s fastest growing region, with the company seeing double digit growth there last year.
“As a global player we would not exist if Asia Pacific was not a big part of what we do. We serve global clients who are heavily invested in Asia. At the same time, we help local clients who are becoming global,” Tahiri says.
The company also has a strong presence in China, where it has around 4,000 employees, with an operations and technology centre in Hangzhou. Alongside supporting investment into China through the Bond Connect and Stock Connect schemes, it also has a domestic FX business.
Asia Pacific is also an important innovation centre for State Street. Tahiri says: “Don’t underestimate the level of innovation in this part of the world. Clients here have to differentiate to grow. It is more and more a centre of excellence and innovation for us. This is why we are investing in the region, because it is the future.”