Global markets

Global markets

Future-focused
performance and
innovation

Nadine K

Global Markets

Future-Focused Performance and Innovation

Clients came to us at a time when they really needed a partner. This was State Street at its best.

Nadine Chakar Head of Global Markets, Boston

Our Global Markets business provides institutional clients with innovative liquidity access options and diverse financing solutions, backed by expert insights. The team’s comprehensive liquidity offering supports clients’ foreign exchange, electronic trading, portfolio restructuring, and currency hedging requirements across multiple open-source architecture platforms. Solutions delivered on our global suite of award-winning1 electronic trading platforms are designed to increase transparency, improve trading efficiency, and deliver quantifiable execution, while our proprietary flow indicators, macro strategy expertise, and quantitative investment analytics help keep clients abreast of market shifts — and the potential impact to their business.

As we entered 2020, our focus on innovation positioned us well to support clients as they sought to simplify their operating models, manage liquidity, and streamline their investment processes. The pandemic tested our resolve and readiness. Our Global Markets group rose to the challenge and tapped into State Street’s balance sheet, operational strength and resilience, IT infrastructure, and unique insights to help clients during a period of great stress and uncertainty.

Delivering in Any Environment

Our GlobalLink electronic trading platforms weathered record-high volumes in the worst of market volatility. FX Connect®, our multicurrency, multibank foreign exchange (FX) trading platform, also handled record volumes, with emerging market currency trading volumes rising 30% year over year. Our robust controls and processes, backed by a strong technology infrastructure, ensured continuous trading. As a leading liquidity provider to real money managers and a top-10 FX provider worldwide2, our ability to seamlessly transact large volumes prompted several clients to elevate us to their primary FX provider during the past year. Our preparation over the past several years, including a focus on electronification and portability of trading across desks around the globe, enabled consistent delivery of customer support despite the most challenging operating conditions.

In its annual FX survey, Euromoney Magazine recognized State Street’s foreign exchange offerings, naming it
No. 1 in Real Money Market Share for the third consecutive year, No. 1 in Customer Satisfaction Globally, and No. 1 in Research for Real Money, and ranking FX Connect second-largest multidealer platform and first for Real Money clients. FX Connect was also rated best platform for the eighth consecutive year by P&L Readers’ Choice Awards, and best FX trading platform in the FN Trading & Tech Awards.

When our clients had specific liquidity challenges — whether in FX trading or securities lending — we came up with ways to bridge shortfalls so clients did not incur unnecessary losses. Doing what was right for the client remained our highest priority in 2020; we were there for our clients when it mattered, while at the same time adhering to our culture of risk excellence.

The pandemic-induced uncertainty and volatility within financial markets not seen since the 2008 global financial crisis caused many of our clients to reassess their business models and outsource aspects of their trading function. Using our comprehensive outsourced trading solution, clients were able to gain efficiencies and scale in their trading process, reduce risk, and refocus resources on growth opportunities — all while maintaining oversight of their trade execution. We anticipate this trend to continue, as more institutions seek the benefits offered by an outsourced trading model.

Martine Bond

Being able to give our clients access to information so they can make better investment decisions and make it easier for them to trade — that is the Global Markets mission.

Martine Bond Head of GlobalLink, London

Measuring the Impact

When money market liquidity levels were threatened in March, regulators looked to our expertise as a Global Systemically Important Financial Institution. The Federal Reserve Bank of Boston called on us to help prevent a run on prime money market funds, as skittish investors fled into safe-haven, government-invested vehicles.

Hours after recognizing the problem, State Street worked with the Federal Reserve to operationalize the Money Market Mutual Fund Liquidity Facility loan program and was the first financial institution to participate, helping guarantee a flow of capital into threatened money market funds.

Our data-driven research provided regulators with insights into inflation trends, risk indicators, money flows, and investor sentiment. State Street executives remained in frequent contact with regulators around the globe, sharing insights on what we observed in the market at critical junctures.

Our proprietary Price Stats series, which monitors trends in retail prices and consumer demand in 22 countries, was provided to central banks to help them formulate their policy responses to the economic fallout of the pandemic.

Advancing Product Innovation

Though it was a challenging year in many ways, our culture of innovation thrived. Our focus on improvement was evident in several new products and services introduced in 2020. We launched Collateral+, a tool that helps asset managers and owners calculate, navigate, and optimize ongoing margin requirements for uncleared over-the-counter derivatives, including FX options, swaptions, and hedging trades. Collateral+ helps maintain on-time compliance with the new requirements on uncleared margin rules, while simplifying and incorporating the new workflows needed to address them.

Later in the year, we marked the 20th anniversary of our Fund Connect money market trading, analytics, and cash management tool, with an upgrade to its user interface experience, and expanded reporting capabilities with real-time systematic updates. Fund Connect remains an industry-leading, integrated platform providing access to more than 400 money market funds from leading providers.

Our award-winning3 BestX transaction cost analysis (TCA) platform completed its multiasset class build-out and now offers traders the ability to assess and compare the quality of their FX, fixed-income, and equities transactions, regardless of execution provider or venue, with unparalleled data visualization and data integrity. We expanded the volume of our TCA business to $24 trillion during 2020.

With a focus on delivering industry insights and best practice, the BestX platform was named Best Execution Product of the Year in the Risk Markets Technology Awards for the fourth consecutive year.

Demonstrating our leadership in securities finance, we expanded the focus on our enhanced custody solution, offering clients market insights on forward-looking topics such as aligning responsible investing with securities finance and the impact of short selling on environmental, social, and governance (ESG) considerations. These improvements led to State Street being named Most Innovative Lender of the Year in the Global Investor/ISF Survey.

Catherine Moore

Moments of high market uncertainty and volatility are when our team truly outperforms. Our history of reliability and consistent market-making capabilities through crises gives our clients the confidence to act and execute decisively.

Catherine Moore Vice President, Foreign Exchange Trading, Boston

Building the Future

State Street’s depth of expertise and capacity to innovate has created a product pipeline designed to solve real client problems. Technology is at the heart of our progress, so we are working closely with our information technology group to craft new solutions and eliminate legacy systems that no longer meet our objectives. Infrastructure investment remains a priority, and we will continue to refine our systems to increase efficiency.

As digital assets gain momentum, we anticipate greater demand on banks and financial service partners to deliver integrated servicing solutions for these assets — from custody and accounting to trading and risk management. Through our own product development and partnerships, we are investing in tokenization and examining the potential to tokenize various fund structures and collateral to enable clients to add cryptocurrencies to their portfolios.

Building on that momentum, we will be servicing an emergent class of digital ETFs, creating digital cash solutions and evaluating the trading of crypto-currencies, while enhancing our conventional trading platforms to enable digital asset trading platforms. During the year, we advanced our digital asset pilot with cryptocurrency exchange and custodian Gemini Trust Company, announced in late 2019. A first-of its-kind partnership, the pilot builds on research and development to combine Gemini Custody™ with State Street’s back-office reporting. We also invested in the leading crypto asset software and data provider, Lukka, which provides middle- and back-office software and data solutions to simplify the crypto accounting process. We will continue to leverage our expertise and partner with leading financial technology firms to develop industry-shaping solutions to enable our clients’ rapidly evolving use of digital assets.

Looking Ahead

In a year that brought incalculable challenge and change, we embraced our values and partnered intensely with clients to solve their most complex issues through innovation, creativity, and perseverance. Our efforts were rewarded with strong financial performance, expanded relationships, and new client wins. As we move forward together, we will continue to leverage the very best of State Street Global Markets to help our clients remain resilient and flourish amidst a rapidly evolving financial services environment.

Emily Busby

For me, the transition to a fully remote work environment has been seamless and productive. Support from senior management has been unwavering, and my team and I quickly adapted, efficiently executed, and successfully attained our goals by embracing technology and new ways to collaborate.

Emily Busby Business Analyst, Workplace of the Future, Boston

1 Source: Euromoney FX Survey 2020, P&L Readers' Choice Awards 2020, and Risk Markets Technology Awards
2 Ranked 9th-largest FX provide globally by Euromoney Magazine in its FX Survey, July 2020.
3 Named Best Execution Product of the Year in the Risk Markets Technology 2021 Awards

Details 01/21/2021