"The Internet is transforming securities services, effectively exploding boundaries and changing the concept of information on demand into reality." Thus spake Tom Perna, senior executive vice president, Bank of New York, in a recent article entitled Web Technology at the Core of Industry Evolution. "The impact of the medium is just beginning to be felt."
Do custody websites reflect the central importance that many of the global custodians say the Internet has for the future of their industry? A quick review shows that while some do, or at least try to, some don't.
For its part, Bank of New York is among the leading pack. Since April 1 this year the Internet platform and browser technology have been the only platform that the Bank of New York has rolled out to clients as their main line of communication with it in custody (www.bankofny.com/bus/bcbsglblcust). "We will be retiring our Windows and DOS-based products as we migrate all clients off these products onto Inform," says Jeffrey Kuhn, New York-based senior vice president in charge of Internet strategy and technology supervision.
Inform is an interactive service allowing clients access to all the bank's products, and including an element for settlement instructions input, performance measurement and foreign exchange order management. Bank of New York announced in early June the release of an enhanced version, giving clients access to Inform Instruction Capture (IIC), a secure trade instruction vehicle that provides clients with real-time entry and validation of securities-related instructions.
The public websites of all the major custodians are easy to assess, but the core areas, where the most interesting possibilities lurk, remain frustratingly out of bounds. Without the passwords needed to gain access, it is almost impossible to gauge whether the reality matches the rhetoric. That caveat having been issued, certain messages come through loud and clear, one of which is that arguably the most widely respected custodian site remains that of Brown Brothers Harriman (www.bbh.com).
BBH has for some time billed itself as the first global custodian to offer its clients access to account information via an Internet-enabled, browser-based, information delivery system. BIDS WorldView offers immediate access to portfolio valuations and reporting tools. The workstation allows clients to access, sort, filter and view comprehensive information about their cash and securities, real-time trade status reporting and share availability. BIDS WorldView utilises a centralised data warehouse and an underlying relational reporting repository to provide clients with enhanced research capability with links to related data. The pre-launch of its web-based wholesale fund supermarket Fund WorldView at the 23rd annual Sibos conference in September underlines BBH's determination to maintain its leading position.
Fully launched at Sibos was Deutsche Bank's db portfolio offering (www.dbportfolio.com). Deutsche Bank describes db portfolio as a fully Web-enabled Web-based platform, pulling together a comprehensive package of investment and securities services to deliver a genuine breakthrough in information integration. Deutsche Bank generously arranged an on-site live hands-on demo, the main reaction to which was, unfortunately, a severe case of information overload and a splitting headache.
Deutsche Bank trailed badly behind its web-enabled competitors during a similar review earlier this year. It believes that db portfolio has put the bank two years ahead of the competition, although it just as readily admits that it has no reliable way of verifying this, other than the excited feedback received from potential clients of the service.
Chase Manhattan claims that its Global Investor Services (GIS) 'Clients Only' website provides seamless access to Chase applications, and information access. From the website, institutional investors can tap into their accounting, custody, securities lending, and performance data as well as market news and quotes, global network and compliance information.
At State Street (accessible via www.statestreet.com) In-Sight provides a single Internet portal to clients through which the bank can deliver data and information from multiple sources. The browser-based interface gives clients the option of communicating via State Street's private network or via the worldwide web. More than 90 per cent of all State Street clients are currently accessing the system over the Internet, says the bank. A corporate actions capability is well established, say vice presidents Simon Pilkington and Michael Short, while transaction capabilities are in development and are set to go live later this year.
At Citibank, progress is reported to be taking place rapidly
in upgrading from a product and markets information provision
service (www.citibank.com/corpbank/wwss/).
Criticised earlier this year for its mangling of the English language,
the new BNP Paribas site (www.bnpparibas.com) offers such continuing
delights as: "BNP Paribas announced today the formation of
Global Risk Solutions (GRS). In the context of creating incremental
value for corporates, the new holistic approach of risk management
breaks down the traditional distinction between capital markets
and insurance markets. GRS responds to this evolution by combining
the full range of risk transfer techniques available from both
markets." It's English, Jim, but not as we know it.
HSBC appears to have reacted to earlier criticism by tidying up its site, at least linguistically, the standard of English having improved since this year's earlier inspection ((www.gis.hsbc.co.uk). The best word to describe the site in its current form is Spartan. It shows many of the classic signs of having been rushed into existence to enable the bank to point to a web presence, brochure-ware and static information making up the bulk of the content. More is to come though, says Henry Raschen, strategic development manager at HSBC GIS in London. "We recognise the site's shortcomings, and there are plans to implement a more sophisticated website later this year and next," he says. "Along with the rest of the securities industry we are examining ways of maximising use of the Internet's capabilities, in our case benefiting from the forthcoming hsbc.com brand name and portal."
Northern Trust too has revamped its site in recent months. Jana Schreuder, corporate e-commerce director at Northern Trust in Chicago, says this will make the site easier to read, more robust, and increase levels of personalisation and customisation.
Last but not least, Royal Trust Global Securities Services (GSS) launched its redesigned website in late July (royalbank.com/gss), with the aim of broadening the scope of products and services to be made available to clients through this channel. One of the site's key components is the global market information Web service, enhanced to include daily updates on market changes around the world.
The site offers the usual range of corporate information, recent
international survey rankings and key contacts within the bank,
and ViewFinder, an Online Service Applications area, currently
housing global market information and the Benchmark Performance
Measurement tool. Scheduled for addition this autumn are portfolio
information and trade processing functions. Looking ahead, GSS
says it plans to Web-enable a host of other existing services,
including tri-party repo, securities lending, investment analytics,
derivatives reporting and corporate actions.
A version of this article appeared in the Financial News Global Custody Review survey in September 2000.
Brian Bollen
Freelance Writer, Editor & Media Consultant
3 Ebbsgrove
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Email: brian.bollen@virgin.net