Northern Trust maintain trajectory

It is hard to believe that Northern Trust has been competing the Australian custody market for less than a decade. 

The US-based custodian actually entered the Australian market in 2007 and has been building its presence ever since, with the most recent Australian Custodial Services Association placing Northern Trust as being the fourth-largest player in terms of assets under custody and the fastest-growing. 

There are five key factors that continue to support Northern Trust’s growth: 

Confronted by established players such as NAB Asset Servicing, JP Morgan, and BNP Paribas, Northern Trust has managed to grow year on year since its Australian entry with the company’s head of client services, Australasia, Sally Surgeon attributing the growth to the company’s willingness to add the services and capabilities that clients want. 

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“Since arriving in 2007, we have continued to add capabilities providing a full service offering for the Australian and New Zealand market and delivering a range of custody and administration solutions for institutional clients,” she said. 

Further Surgeon made clear that Northern Trust’s involvement in the Australian market was a work in progress, something which was indicated by the recent announcement of the company’s acquisition of brokerage firm, Aviate – something which not only added to the broader service offering but also gave the company a presence in Sydney. 

The key is to understand how clients think about the middle office and to work with them to build solutions that meet their needs.

– Sally Surgeon

Surgeon said the Aviate acquisition was in line with Northern Trust’s strategy to broaden the depth and breadth of its service offering in Australia and also complimented an existing US capability on a global level. 

Not unlike its competitors such as BNP Paribas and State Street, Northern Trust has developed an approach in Australia predicated on projecting global experience and capability through a team with both local and international experience. 

Surgeon said she believed the company’s clients valued the benefits of a global model, with 35 per cent of the Australian team having worked in other Northern Trust locations, equipping them to navigate what represented a global organisation. 

“This has been a key factor in delivering a robust service model to clients. In addition, we have also exported Australian talent and experience to other locations which has also benefited our clients. We have expanded, taking additional space in Melbourne and most recently we have opened an office in Sydney, and welcomed the Aviate team to Northern,” she said. 

In similar fashion to its competitors, Northern Trust has looked to deliver on middle office services for its clients, but Surgeon said the key was to understand which services were actually in scope. 

“The key is to understand how clients think about the middle office and to work with them to build solutions that meet their needs,” she said. 

“Our role becomes very much an extension of the client’s back and middle office. Services could include investment operations outsourcing, trade matching , financial reporting, derivative management as well as risk and performance reporting. All or some of these services can usually be found within a middle office service offering.”