RBC Investor and Treasury Services is throwing its digitization effort behind transfer agency, where it sees the opportunity to grow its business.
Paul Stillabower, London-based managing director and global head of product management, says making a digital strategy is leading the bank to consider where it can make an impact that will boost revenues.
Transfer agency, sometimes called the registrar, is the business of tracking clients, subscribers and redeemers of mutual funds. It requires constant input from both fund managers and their distributors. In Asia, fragmented markets with varying regulations have to date made T.A. difficult to scale.
Because it is difficult, there is an opportunity to use technology to deliver value that clients will pay for, Stillabower says.
“We like the T.A. business,” he told DigFin. “Transfer agency is rich in data. We want to continue to improve the service experience, and lead rest of the market.”
Using data like fund, trade and foreign-exchange flows, which all feed into tracking fund activity, can fuel the bank’s analytics for higher value-adding services – such as intuiting investment decisions, measuring operations risk or helping with compliance monitoring.
Transfer agency is rich in data
“There is revenue potential from providing insight on top of the data,” he said.
Custodians will rely on this more as other services become commoditized. Core custody and fund accounting lost pricing power long ago, although regulation and reporting can still give banks something to charge clients for. But increasingly the digital drive means data analytics as a service will propel the business, Stillabower says.
Moreover, by focusing on a niche like the registrar function, RBC can help set standards, particularly outside of the U.S. (where the business is more uniform and automated). “We can industrialize this product,” Stillabower said, and link it to services for large pension complexes, such as Australian superannuation funds and Canadian pension funds, as well as asset-management companies.