BNP Paribas Securities Services has started a global program, which it is calling “augmented custody”, which will give it an edge over competitors for speed of actions across a range of investment administration activities. Australian and New Zealand clients will be early beneficiaries.
The program follows a systems upgrade and will cover 24 of the 26 markets in which BNP Paribas acts as an agent, such as Australia and New Zealand, as well as global custodian.
The cornerstones of the enhancement are standardising processes across the different markets and implementing segregated account structures.
David Braga, head of Securities Services for Australia and New Zealand, said last week that the upgrade involved “pushing down” the accounting process for each client, in those available markets, to allow straight through processing, rather than having a traditional “omnibus” or “aggregated” process. In effect, this means faster information transfer.
“We are now able to take the time delay out for corporate actions, because we avoid one of the [former] processes,” he said. “Asset managers and funds will have more time to analyse a market event. That’s very valuable because the later you [transact] the better information you have because life changes.”
BNP Paribas believes it will be the fastest global custodian operating in the Australian and New Zealand markets. In Australia, for instance, the custodian will now have corporate actions deadline, ahead of the ASX’s CHESS daily cut-off time of 11.30am, of an hour compared with two-and-a-half hours previously.
The program roll-out, which has already commenced, will take until about midway through 2017. The upgrade involved an enhanced data management platform which followed harmonised corporate action, income and tax reporting across all markets.
In a statement, Patrick Colle, BNP Paribas global general manager for securities services, said: “This approach is a first in the custody industry and is helping us lead the market in ensuring our clients and their managers receive information from BNP Paribas as quickly as possible as well as allowing us to set deadlines for our clients to provide instructions to us later than those of our competitors, giving them more time to make investment decisions… Our ambition is to enhance our core services thanks to the power of digital.”
Meanwhile, BNP Paribas was this month anointed as the “World’s Best Bank” in Euromoney’s annual awards. Euroomeny said that BNP was a rarity because it actually delivered on its promises to stakeholders, producing better returns than many US banks despite its low-growth home region.
* Greg Bright is publisher of Investor Strategy News (Australia)