Client Q&A – State Street’s Suren Sankar

At InvestOps USA 2024, Taskize’s CRO, James Pike was joined on-stage for a panel discussion with Suren Sankar, MD Global Custody Product at State Street. Together they talked through challenges and opportunities in the collaboration and workflow space, through the lens of a global custodian bank. 

The session focused on the critical role of system integrations and emphasised the importance of interoperability among market participants, regulators, and technology providers. Here we recap some highlights from the conversation. 

“Our clients are choosing different strategies,” Suren explained to set the scene. “Some adopt fintech solutions while others develop in-house capabilities. As a global custodian, we serve around 3,500 clients & investment managers, so it’s crucial for us to guide them through their respective journeys while adapting our processes to support them effectively. Additionally, regulatory challenges continue to emerge, demanding that we stay agile and responsive to our clients’ evolving needs.” 

James Pike: In terms of the problems facing us today, real-time assessment is often mentioned. How are you addressing this? 

Suren Sankar: I think collaboration is key. The proliferation of fintech solutions has led to multiple competing options, which can sometimes be confusing for our buy-side clients. For instance, there are solution providers that offer similar data integration services, if not the same services. We need to be interoperable to meet the varied demands of our clients.  

The industry must push for more collaboration among global custodians and agent banks to create integrated solutions with critical mass, and these need to align with the overall market needs rather than individual strategies. By working together, we can better serve our clients and streamline industry practices. 

Do you see the systems you have in-house as a challenge? How do you manage the need to renovate and move to new platforms? 

We have historically been a ‘build-focused’ organisation, which allows us more control in driving our product roadmap. The downside is that time to market can be delayed and continuous development is required to remain at the forefront of innovation.  

Recently, we’ve adopted a more hybrid approach by partnering with fintech firms where it makes sense to do so, whilst driving the integration with in-house development and configuration. A good example of this is the account opening digitisation effort, whereby partnering with a fintech allowed us to bring our product to market much quicker than we would have been able to had we fully developed in-house.  

This hybrid model – buying off-the-shelf solutions and customising them – has been effective. We also established an IT development team dedicated to continuously improving these platforms, ensuring we maintain control over our strategic direction. 

Are you looking to drive operational efficiency mainly within your organisation, or are you also seeking to extend this journey to your clients? 

Ideally, we’d like to see both. When we talk about operational efficiency, it’s not just about cutting costs. Over the past few years, we’ve invested heavily in operational capabilities to support new markets and vehicles.  

Our focus now is on sustaining organic growth without proportionally increasing our operational overhead. This involves a dual approach: enhancing our internal efficiencies and collaborating with industry peers to drive collective improvements. 

By becoming more efficient internally, we are able to improve our operating model by providing value-add services which ultimately leads to improved client sentiment. 

However, achieving industry-wide operational efficiency requires broader cooperation across the ecosystems, which is challenging given that firms are driving their own strategies and are at different stages of their respective journeys. Hence, our current focus is on what we can control, ensuring that our growth remains sustainable through a digital-first approach that is fully interoperable with our clients, appointed investment managers and other 3rd parties; whilst providing direction & influence for the betterment of the industry. 

How can you balance adding technological capabilities with managing operational costs? 

We need an appropriate operating model that leverages technology without unnecessarily increasing operational complexity. For example, as we evolved and introduced new processes, we initially found some solutions to be too costly and unsustainable. We then shifted to a more scalable approach, leveraging technology to drive efficiency.  

A good example of this is the partnership with Taskize which allowed us to move our inquiry management capabilities to multi-directional/multi-party from a manually intensive linear process. Collaborative efforts like this allow all stakeholders to see real-time changes and reduce operational friction. 

What are the main areas of focus for improving operational efficiency and scalability? 

One major focus is data integration throughout the banking chain. Currently, retrieving information often involves multiple manual touchpoints. By moving data efficiently up the value chain, we can reduce the number of inquiries and manual interventions. Our goal is to standardise and normalise this data, pushing it directly into our clients’ platforms in interoperable ways, allowing for streamlined processes that minimise exceptions and manual touchpoints. 

Last year, we conducted a proof of concept with one of our partner banks to streamline our processes. We identified that a significant portion of inquiries stemmed from a lack of access to essential information. By integrating data directly into our infrastructure, we were able to reduce the number of manual touchpoints and provide much more timely responses to client queries.  

Stitching together various solutions to create a cohesive infrastructure is key. However, each organisation must understand the boundaries of available technologies and tailor their approach accordingly. 

You mentioned “stitching together” various solutions to create a cohesive infrastructure. Could you elaborate on the importance of this? 

Collaboration is paramount as is flexibility to support the different models the various players in the ecosystem are adopting.  Flexibility allows us to interact with our clients in the ways in which they want to, allowing them to stay native in their platforms of choice.  

Also, collaboration extends beyond internal processes to partnerships with fintech firms. While these collaborations offer immense potential, it’s essential for fintechs to understand their strengths and focus on integrated solutions that align to their value proposition rather than trying to solve for ALL industry challenges.  

I think collaboration will continue to be a driving force behind innovation and efficiency in the financial services industry as firms look to bolster their solutions with some of the exciting new technologies including generative AI & blockchain as well as some of the more established ones including machine learning and natural language processing.  

Suren, thank you so much for sharing these insights… In summary, how do you see the future of banking operations and client service evolving? 

The future lies in seamless data integration and automation. By enhancing our data flow and reducing manual touchpoints, we not only improve our internal efficiency but also provide better, more timely service to our clients.  

This requires an industry-wide effort to adopt standardised data practices and collaborative technologies. We’re optimistic that, as we and our peers continue to innovate, we can collectively enhance the overall efficiency and effectiveness of the financial services ecosystem.