Euromoney Foreign Exchange Awards 2023: Best bank services – best FX bank for research: State Street
More than 80% of the world’s largest asset managers consume State Street research, as well as global sovereign wealth and pension funds and corporate treasury departments.
“Research has become an integral part of our markets offering across FX, equities and financing,” explains William Kinlaw, global head of research. “The recurring feedback we get from clients is that our research is both innovative and different. They value this because, if you are a fund manager trying to beat your benchmark and you are following research that is in consensus with the herd, it doesn’t really help you. You need an edge.”
Even discretionary investors are using data and models more than they ever have had to gain a better understanding of what have been very challenging markets over the past few years, adds Michael Metcalfe, head of macro strategy.
“We have invested in partnerships with leading academics from Harvard, MIT, Boston College and other universities that we are consistently able to turn into actionable insights for clients managing their FX risk,” Metcalfe says.
“This award is recognition of the value and uniqueness of these insights, alongside growing interest from our clients,” he adds. “They deserve credit too as some of our best research comes from trying to answer the challenging questions they pose.”
State Street also taps into data.
“Unlike some of the other big FX providers, we have a huge custodial arm from which we can get aggregated views into how currency is flowing around the world,” says Kinlaw. “This insight into the headwinds and tailwinds of the market is hugely valuable to our clients.”
In the review period, State Street pioneered an interpretable approach to using machine learning for FX return predictions. Mind & Machine is based on a 2020 paper published in the Journal of Financial Data Science introducing ‘model fingerprint’, an intuitive technique to describe the logic of any machine-learning prediction.
The redesigned Insights client research platform improves research delivery in several ways including a client-customised recommendation engine, unified interactive charting across all data-driven indicator suites, and a module for flexibly defining multi-indicator investment regimes and computing conditional historical return, risk and VaR statistics for a range of assets and strategies.