Northern Trust recently announced that it had received Finma regulatory approvals to extend its local capabilities. Gil Platteau and Joanne O’Brien explain what the Depotbank license means for the firm’s ambitions in Switzerland.
What motivated Northern Trust to seek regulatory approvals to offer Depotbank services?
O'Brien: Northern Trust has been servicing Swiss institutional investors and investment managers over the past three decades and has a significant book of business with some of the world’s most sophisticated asset owners and managers. We see the establishment of a Swiss regulated entity in the form of a branch of our Luxembourg and EU Bank, Northern Trust Global Services SE, as a natural evolution of our business, building on our credentials as the leading fund administrator in the market following our acquisition of the fund administration business of UBS Asset Management back in October 2017.
Platteau: We have over 100 partners locally in Switzerland with an intricate knowledge of our Swiss clients’ unique needs, bringing in-depth local knowledge of accounting, tax and local reporting requirements. Our ability to now offer Depotbank Services, led by Marco Wiegmann, enables us to fully unlock our local expertise in Switzerland and support our client's entire value chain.
Can you elaborate on what you mean by supporting your clients’ entire value chain?
Platteau: We’re aware that often asset servicers are only associated with custody and fund administration in Switzerland. Our value proposition goes far beyond this, and this is where the notion of servicing the entire value chain comes in.
O'Brien: The financial industry as a whole is moving away from the notion of front, middle and back office and we now find that clients are searching for partners that can support them across their whole office.
Platteau: Increasingly, asset servicing is more about how we can support asset owners and asset managers to make their operating model more efficient so they can focus on their core business. To do this, we offer them an end-to-end operating platform on and through which they can execute their business strategy.
O’Brien: At Northern Trust, our open-architecture approach integrates our platform with other innovative partners to offer our clients maximum optionality, interoperability and access to best-in-class technologies and capabilities in an increasingly digitized environment.
Concretely what does this open-architecture approach mean for Northern Trust’s clients?
O’Brien: Our clients are going to have specific requirements that no one solution is going to meet. The «Whole Office» means different things to different clients – they may feel they have good solutions in some areas, but need more support in others to optimize their whole office operations, and that’s where we can step in.
Platteau: We deliver a platform and capabilities where clients can address any potential gaps or challenges they have across the entire front-to-back office value chain, and access new technologies, services and solutions across the spectrum of strategy execution, trading, operational, data and digital and analytical solutions.
Can you give an example of a solution that crosses this spectrum?
O’Brien: One of the methods asset manager and asset owner clients are using to become more efficient and save costs is to focus on their investment process and stock selection, while outsourcing trading. We provide them with front office capabilities through outsourced trading in equities, fixed income and foreign exchange, together with a fully integrated middle and back office service to lower risk, to enable them to manage their regulatory compliance and increase operational efficiency.
What opportunities do you see going forward for Northern Trust in Switzerland?
O’Brien: We are very positive about the Swiss market. With close to $50 billion of assets under custody (as of 31 March 2021) and over $500 billion assets under administration (as of 30 June 2021) in Switzerland, our know-how and understanding of the market – across the asset management and institutional space - is deeply rooted in our organization.
Platteau: Similar to what we see in the rest of Europe, Swiss investors face the need to streamline their governance structure and find ways to address risks, margin and costs pressure. With the most successful institutions rethinking their operating models from the perspective of their whole office and seeking holistic changes such as outsourcing, that can help them grow their businesses, return value to their clients and investors. This presents opportunities for asset servicers such as Northern Trust.
Joanne O’Brien: Currently Senior Vice President and responsible for Northern Trust’s business development efforts across EMEA, including Switzerland and Luxembourg. Prior to her role in Business Development, she held various senior positions across Northern Trust’s operations, service and relationship management groups globally. This expertise enables her to work with clients to identify optimum operating solutions that support a firm’s whole office to deliver their business and strategic objectives. With over 15 years of industry experience, Joanne has also held positions at Bank of Ireland Securities Services and Bank of America.
Gil Platteau: Currently Senior Vice President and a member of Northern Trust Switzerland’s senior leadership team, he manages key relationships with institutional investors in Switzerland and across EMEA. He joined Northern Trust in September 2019 and brings 20 years of industry experience including senior roles at Rothschild Asset Management, Barclays and Mercer Delegated Solutions in Zurich as Country Head.
