RBC I&TS
Richard Street of RBC I&TS suggests that understanding how quickly regulation can impact the market, and responding to it, is probably the biggest challenge that this industry has faced
What does your role involve?
My team are responsible for the firm’s client relationships in the region, working closely with clients to understand their needs, how they are likely to evolve, and how we can best support them amid industry and regulatory change.
What asset services can RBC I&TS provide that is different from other financial services?
We are focused on providing products and services to an array of asset managers in Europe from trustee and depositary services all the way through custody, fund accounting, transfer agency, securities lending and the supporting treasury services, such as cash management and foreign exchange (FX).
Where we differentiate ourselves from our competitors is through our specialisms and unique product offering.
For example, one key specialism is our deep experience in offering offshore services to funds in Luxembourg and Dublin, where we have almost 30 years’ UCITS expertise.
We are keen to help our clients to support their own clients. As such, we have invested heavily in the transfer agency business and service around 30 percent of the Luxembourg third party transfer agency market.
Another area of differentiation is the alternative investment space, particularly private equity and real estate assets, where we offer an end to end service including capital call financing.
Our balance sheet allows the new private capital fund to draw down on a facility to assist with liquidity and speed of execution.
We have combined this offering with our core administration and trustee/depositary services. We have seen significant traction as institutional investors look to invest increasingly in the real assets and private capital space in order to diversify and generate higher returns. We’re also working with a number of US clients who have launched parallel funds in Europe to attract investors and leverage the Alternative Investment Fund Managers Directive regulation and its heightened transparency, reporting and controls.
We are also able to differentiate through technology, having invested heavily over the last three years in a programme that we refer to as the Advanced Client Experience (ACE).
ACE has been focused around simplifying our core systems, improving our delivery capabilities, including an electronic dashboard, electronic reporting and communication capabilities. We are now leveraging the data we hold and work closely with clients in order to make it more useful and meaningful.
As an example, in Luxembourg, we are leveraging our leading transfer agency position and rich data set to see flows going into and out of different fund strategies and fund class types. We take this data, normalise it, and compare it with the data our clients hold.
This provides insight from which to evolve their product set or improve their sales focus. By partnering with our clients in this way, we are able to help them make informed decisions based on sophisticated data, and drive business growth.
Are there any particular trends that you are currently seeing in the asset servicing industry?
Beyond data trends, asset managers increasingly need to be able to demonstrate to regulators and their clients that there is full transparency and appropriate oversight of outsourced relationships. Asset servicing providers can support this by providing data and dashboards, highlighting exceptions and where attention should be directed.
What are the main challenges that the industry faces today in terms of regulation?
Understanding how quickly regulation can impact the market and responding to it, is probably the biggest challenge that this industry has faced across asset servicing and asset management.
It tends to be an iterative process with clients growing their understanding through discussions in the industry and by working with their asset servicing provider.
The real key is an early warning. For example, we partner with Thomson Reuters to enhance our regulatory news and analysis that we provide to our clients.
How is technology affecting the industry? How do you think artificial intelligence (AI), in particular, will change asset servicing in the future and what trends is RBC I&TS currently seeing in that space?
Artificial intelligence (AI) will change asset servicing in the future. We are an operations business so custodians and fund administrators will inevitably need to use the latest technology to produce efficiency, and robotic process automation (RPA) is a valuable step in this process.
The benefits of RPA in activities such as fund administration and custody are faster processing, reduced risk and access to more focused exception reporting. As a result, firms can redirect their efforts to high-value, strategic activities that improve services and support their clients, rather than devoting time to repetitive tasks.
These technologies also provide greater ability to collect more detailed processing data, which is key to continual improvement capabilities.
The industry should look beyond using AI to complete manual processes by automating these through its core systems. Instead, it should look to strengthen its operations by using the new technology to move its exception processing into a standard operating environment.
As part of a broader RBC programme in new technologies and innovation, we have a number of labs which are running successfully and we are deploying RPA into our operations as we speak.
