As passive investment continues its relentless takeover of the asset management industry, securities servicing is a sector under acute cost pressure. It is highly commoditized and margins are so low that it can be tough to differentiate on anything but price.
The winner of the award for the world’s best bank for securities services has an edge, however, and that is scale. Citi is Euromoney’s winner in this new category for 2022.
“Clients are under cost pressures,” explains Okan Pekin, global head of securities services at Citi. “ETF [exchange-traded fund] fees have been driven to very little; if asset servicing doesn’t keep up with that margin pressure, everyone loses the business. The only way you can keep it is to keep positively reinforcing the cycle, using tech and using the network to drive more scale through your system.”