Serving institutional clients across the front, middle, and back office through custody and related value-add products, the Institutional Services group drives sustainable growth for our company and our clients across segments and regions.

We empower our clients with market-leading differentiated solutions and thought leadership that help them make better investment decisions, streamline their operating models, and manage their cash and assets more efficiently. We build long-lasting partnerships with our clients in which we co design, co-invest, and innovate together to help them not only succeed in today’s environment, but also thrive in the markets of the future.

EXCEEDING PERFORMANCE GOALS

Over the past year, we strengthened the leadership of our client segments and sharpened our focus on enhancing the client experience, establishing a team dedicated to understanding and improving client sentiment across the firm. We re-architected our client relationship model and redefined the country head roles.

As a result, in 2021, we achieved record servicing wins of $3.5 trillion, with $2.8 trillion of that business to be installed in future periods. We also generated record servicing fees of $5.5 billion, up 7 percent year-over-year. Our success was driven by growth within our Asset Managers, Alternatives, Insurance, and Official Institutions segments.

PUTTING OUR CLIENTS FIRST

Throughout 2021, we continued strengthening our operating structure and transforming our client management model to improve client sentiment and drive sustainable wallet share and revenue growth.

To that end, we progressed our evolution from a siloed coverage structure to a fully integrated client management model. Through our “One State Street” approach, we deliver leading insights and a consistent, superlative client experience wherein complexity is reduced, and proactivity is increased, while also bringing to bear our on-the-ground regional knowledge and expertise.

Our enhanced service model combines highly disciplined relationship management with a more targeted and data-driven experience focused on improving outcomes and sentiment. Success is achieved by systematically measuring client satisfaction and using insights from that data to both anticipate our clients’ needs and inform product, technology, and operations investment decisions that help solve our clients’ most complex business challenges.

This new model is designed to accelerate pipeline growth and increase new business wins across segments, clients, and geographies with clear accountability on our team’s execution.

STRENGTHENING OUR CORE BUSINESS

Our progress in 2021 included strategic product innovations designed to strengthen our value proposition across our core asset servicing business that provides comprehensive front-, middle-, and back-office solutions.

We remain at the forefront of developments in exchange traded fund (ETF) markets around the world, leveraging our expertise, consultative approach, and integrated technology to meet clients’ expanding ETF servicing needs. For example, in 2021, we were appointed by Harbor Capital Advisors, Inc. to support the launch of their first actively managed, fully transparent fixed income ETFs.

We were also named servicing agent for a new dual access ETF launched by AllianceBernstein in Australia. The dual access structure enables active managers to run a single register for unlisted and listed investments, for greater operational and investment efficiencies.

To better support our clients’ alternative investment needs, we launched our front-to-back private markets solution in July, allowing institutional investors to manage the entire life cycle of their infrastructure, private equity, real estate, private debt, and fund of funds investments through a fully integrated single platform. This solution provides whole portfolio exposure to managers investing in both public and private markets.

As digital assets become increasingly integrated into the financial services framework, we launched our State Street Digital^SM division dedicated to providing our clients with the infrastructure, insights, and operating model to support their digital investing goals.

PARTNERING FOR GROWTH

In 2021, we continued to forge strategic partnerships to help our clients achieve their growth ambitions and generate sustainable long-term value for our investors. In April, we expanded our relationship with M&G Corporate Services Limited to provide them with outsourced middle-office services.

The agreement builds on a 10-year strategic partnership with M&G in which we extended our current fund accounting and custody services for their wholesale fund ranges to provide middle-office services, including portfolio services, reference data, cash reporting, transaction management, asset servicing, and recordkeeping.

This initiative exemplifies one of the many ways we are helping asset managers remain focused on their investment process, lower their costs, improve efficiency, and deliver desired investment outcomes.

Furthering our commitment to supporting clients with our comprehensive suite of environmental, social and governance (ESG) services, we launched a strategic engagement with S&P Global Trucost that combines the power of State Street’s ESG risk analytics and reporting capabilities with Trucost’s climate data and analytics. Through this innovation, we are providing clients with access to carbon footprint and other environmental data mapped to their portfolios, as well as Task Force on Climate-related Financial Disclosure (TCFD) reporting features to help them navigate the challenges of the ever-shifting global ESG regulatory landscape.

In July, we formed a new strategic alliance with First Abu Dhabi Bank, the largest bank in the United Arab Emirates. The alliance creates a full-service enterprise offering for institutional investors located in the Middle East and North Africa, and those who invest in the region. Clients are looking for financially secure and operationally resilient partners who can manage the non-core elements of their business, and help them achieve operational efficiencies, reduce costs, mitigate risks, and navigate complex regulations.

They are also eager to access global best practices and scale from a partner who understands the local business environment. By leveraging the best of both global and regional expertise offered through this collaboration, we provide a truly customized and flexible service model that proactively drives innovative solutions to meet our clients’ needs.

GENERATING LONG-TERM VALUE

Our clients have faced significant challenges during the past two years. The pandemic has been a catalyst, leading the entire industry to reassess its operational efficiency, resilience, and business relationships. Decisions that were postponed in the first year of the pandemic are now being accelerated. Through ongoing, in-depth conversations with our clients, we know that they want long-term partnerships to help them be more resilient and competitive, and respond more effectively to their priorities.

We will continue to sharpen our focus on delivering long-term value for our clients and investors in 2022 and beyond. Our strategic focus for the future includes refining our solutions to meet increasing client demands around ESG, private markets, enhanced data aggregation and reporting, and efficient operating models.

Understanding that our success is driven by serving as a trusted strategic partner to our clients, and by providing them with the innovative solutions they need, we will continue to implement our integrated client management model across business segments and regions to drive more diversified and sustainable growth for our clients and our company.