Investment Services
Unlocking growth in our core business through partnership, technology, and innovation
State Street’s Investment Services business provides a full range of custody, accounting, fund administration, risk and performance analytics, reporting, and related services for public and alternative assets, as well as multiasset-class investments.
We are an essential partner to global investment and wealth managers, asset owners, official institutions, and central banks, providing critical infrastructure and expertise to help our clients streamline their operating models, harness data to make better-informed investment decisions, and seize growth opportunities in ever-changing
market environments.
Ronald P. O’Hanley
Creating business momentum
Our Investment Services business ended 2023 with assets under custody and/or administration (AUC/A) reaching $41.8 trillion, a 14 percent increase year over year. AUC/A wins for the year totaled more than $900 billion.
In 2023, we advanced a number of strategic focus areas aimed at reinvigorating sales growth in asset services: investing in technology to enhance our products and services, strengthening delivery, and improving client service.
AUC/A wins in 2023
Assets under custody and/or administration
“In 2023 we reinvigorated sales growth, enhanced our products and services, strengthened delivery, and improved client service.”
Joerg Ambrosius
Chief Commercial Officer
Throughout the year, we took steps to improve our sales performance and increase capacity where we see the biggest growth opportunities, with a particular focus on our core back-office custody and related products, which represent our largest revenue pool.
Sustained demand for our front-to-back State Street Alpha® (Alpha) and private markets platforms continued, with seven new Alpha mandates recorded during the year.
We also advanced our targeted expansion into high-growth markets and regions. In Asia-Pacific, we experienced strong sales and extended our services to major clients in Australia and Singapore. We broadened our presence in Latin America with a new office in Colombia and secured a significant mandate in Chile.
Additionally, we completed our implementation of a full portfolio of critical investment servicing infrastructure for a major asset owner client in Saudi Arabia, further augmenting our global reach and service capabilities.
Spotlight on State Street Alpha
Expanding our front-to-back capabilities through tech-led innovation
Launched in 2019, State Street Alpha is the industry’s first front-to-back asset servicing platform from a single provider. Alpha’s technology, services, and open architecture deliver front-, middle-, and back-office services underpinned by robust, centralized data delivery capabilities — helping our clients manage their end-to-end
investment strategies and grow efficiently.
Alpha remains an important differentiator for our business and offers an attractive value proposition for our clients. Continued tech-led innovation, new partnerships, and enhanced capabilities bolstered the platform’s momentum and broad market adoption throughout 2023, helping fuel strategic growth, sales, and revenue across the firm. We recorded seven new mandates in 2023, for a total of 18 clients live at year-end, and deepened relationships with several existing clients, who now benefit from the full breadth of the platform.
Partnerships with leading analytics, data, and application vendors help provide optionality for clients to meet the unique demands of their product and asset mix. In 2023, we announced new partnerships with external providers that enhance corporate bond primary issuance and syndicated loan workflows.
Throughout the year, we added important capabilities and released a significant upgrade to our fixed-income portfolio management solutions. Additionally, we built new cash administration and management services with integration to transfer agencies, custodians, and clients to streamline middle- and back-office processes.
We secured the first mandate on our State Street Alpha for Private Markets platform, which manages private market assets including infrastructure, private equity, real estate, and private debt. This new business validates our vision of providing clients with a consolidated platform for managing public and private assets.
Building on the company’s long history and leadership in the exchange-traded fund (ETF) space, we launched State Street Alpha® for ETF Issuers, supporting the entire ETF life cycle with front-, middle-, and back-office capabilities. The new offering helps investment firms bring differentiated products to market faster for both passive and active strategies.
In addition, with the Alpha platform we are harnessing artificial intelligence (AI) to further streamline operations and enhance analytical capabilities. For example, State Street Alpha® AI Data Quality has boosted productivity for State Street’s data operations teams compared to traditional methods. Similarly, we are utilizing generative AI to facilitate data access and analysis for investment professionals, empowering clients with intuitive reporting tools and data visualization. These capabilities are slated to be released into production in 2024.
We view Alpha not just as a competitive advantage, but as a competitive moat with significant revenue opportunity, which strategically addresses evolving client demands that extend well beyond custody and asset safekeeping and administration.
“State Street’s sustained investment in Alpha has created the first true end-to-end offering that is highly differentiated and resonates with institutional investors globally.”
John Plansky
Head of State Street Alpha
Mandate on Alpha for Private Markets platform
Clients live on Alpha at year-end
Enhancing the client experience
State Street has been on a multiyear journey to simplify our operations and increase productivity, while enhancing client service. In 2023, we further accelerated this transformation.
Building on our strong delivery base in India, we assumed full ownership of one of our operations joint ventures and announced plans to take full control of a second joint venture in India by midyear 2024. Together, these integrations will simplify our operating model and increase our capacity to deliver superior client service.
We also focused on process reengineering and automation to help reduce — and eliminate, where possible — bespoke processes within our Asset Services operations. During the year, we achieved a 7 percent reduction in bespoke processes in our servicing business, and we will continue to drive progress in this area in 2024.
The strategic investments we are making in technology and infrastructure are helping to improve our sales capacity, modernize our product offerings, standardize and streamline the onboarding of new business, and accelerate revenue installation.
“High-quality service and operational excellence build trust and fuel growth —for our firm and our clients. The transformation journey starts with understanding client requirements, then adds strategic technology and process reengineering to deliver enhanced services faster and more efficiently.”
Ann Fogarty
Head of Global Delivery
Investing in technology and automation
State Street advanced its enterprise technology strategy by continuing to execute a long-term investment in our data infrastructure to achieve scale through automation. Our innovation efforts are focused on identifying and delivering efficiencies for our clients, while driving value for our shareholders.
As a technology-led company, we dedicate 20–25 percent of our operating capital to maintaining our market-leading position, spending more than $2 billion on technology development and operational efficiency.
This strategic investment supports our Alpha, automation, and cybersecurity capabilities, and helps us deliver critical engineering expertise and digital competencies for clients. During the past five years, we have invested in our AI program — specifically in acquiring key talent and laying a strong data foundation to progress our strategy — and steadily honed our skills and expertise to deliver more value for the business.
Spent on technology development and operational efficiency
“Our innovation approach is focused on supporting client growth and identifying and delivering efficiencies, while driving value for our shareholders.”
Mostapha Tahiri
Chief Operating Officer
In 2023, we engaged strategic providers of cloud and infrastructure solutions to enhance our cloud-native architecture and deploy machine learning-based automation to bolster our data and AI teams’ capacity for effective data analysis. Our highly skilled, specialist teams dedicated to the development, support, and governance of automation, machine learning, and AI have secured six AI-related patents and are already delivering efficiency and productivity for the firm.
The continuous growth and investment in our AI talent and capabilities position us to capitalize on the coming wave of generative AI applications that will help streamline our service delivery, an important part of the firm’s ongoing journey to simplify our operations and drive high-quality client service.
Across the company, we are fostering a culture of innovation that harnesses the tech tools we have at hand today while investing in the technology of the future to evolve not only our own operations, but the products and services we offer our clients as well.
Our product innovation agenda is led by client need and underpinned by automated processing, interoperability, and a global service footprint. Enhancements to our solutions leverage our integrated, proprietary technology to optimize resiliency, boost speed to market, and manage risk at scale.
“We will continue to focus on integrating emerging opportunity areas such as AI across our business to improve client experience, generate efficiencies for the business, and drive value for shareholders while delivering a secure and resilient framework.”
Brian Franz
Chief Information Officer and Head of Enterprise Resiliency
Last summer, we began developing a prototype generative AI tool that is transforming the way we interact with clients, including providing custom portfolio data and on-demand conversational access to our latest market insights, equipping clients with the tools they need for real-time decision-making.
These enhancements and others are helping deliver on client expectations that we have systems and infrastructure in place to meet their evolving requirements for core custody, liquidity, FX, cash instruction capabilities, timely reporting, and servicing for emerging asset classes, such as newly approved spot Bitcoin ETFs.
“We are providing private markets asset managers with a digitized experience that removes friction, particularly in credit and private funds, and investing in our core data infrastructure to drive scale through automation.”
Donna Milrod
Chief Product Officer
Top industry awards and recognition
Recognizing our core back-office and ETF servicing capabilities and front-to-back platform
- Best Global Custodian, International Clients
The Asset Triple A Sustainable Investing Awards 2023
- Best Investment Management Technology Provider
Asia Asset Management Awards 2023
- Best Middle- and Back-Office Services Provider
Asia Asset Management Awards 2023
- Best Administrator, Client Service
HFM Asian Services Awards 2023
- Best Global Custodian in Asia Pacific (20 Years)
Asia Asset Management Awards 2023
- Best ETF Custodian
ETF Express US, European ETF 2023 Awards
- Best Overall ETF Administrator
ETF Express US, European and Canadian ETF 2023 Awards
- Best ETF Administrator – Fixed-Income ETFs
ETF Express US, European and Canadian ETF 2023 Awards
- Best ETF Administrator – Equity ETFs
ETF Express US, European and Canadian ETF 2023 Awards
- Best ETF Back- and Middle-Office Tech Provider
ETF Express European ETF 2023 Awards
- Alpha Front-to-Back Data Platform recognized
CIO 100 Awards 2023
- Exchange-Traded Fund Initiative of the Year (Alpha for ETF Issuers)
Global Custodian Editor’s Choice Awards 2023
Looking ahead
In 2024, we will continue to advance our asset servicing strategy to grow fee revenue by driving back-office sales, differentiating with our State Street Alpha and private markets platforms, expanding geographically, and leading with client service excellence.
As we further optimize our technology and internal applications, we will continue to unlock increased efficiencies, refine our data capabilities, fortify our risk controls, and provide an exceptional client experience.
We remain true to our vision of being the industry’s global leader in investment servicing, and to our purpose of creating better outcomes for the world’s investors and the people they serve.
