Brendan Toolan and Teruaki Kobayashi of Mitsubishi UFJ Investor Services Luxembourg (MIBL) discuss MIBL’s global custodian partnership with Citi in a feature article in Global Custodian on the re-emerging trend of white label solutions.
1. What were the main drivers behind switching global custody providers?
“At MUFG Investor Services, we are committed to a growth strategy of expanding our Custody business by providing a market leading Custody platform and extended global network reach to our clients. Client needs in the post trade environment are rapidly evolving, and the convergence of Custody product and technology has been an area of research for us for some time now. A key driver in our appointment of Citi as our global custody solutions provider has been to leverage their premium platform and extensive subcustodian network, and also pass on the value-add benefits and cost efficiencies to our client community. We also believe that Citi have a scalable service model that can support our growth strategy in the Custody and Depositary functions.”
2. What factors went into opting for a white label custody solution?
“As part of the thorough analysis of our current operating model and associated cost of infrastructure, MUFG Investor Services have been acutely focussed on opting for a white label solution that would allow our customers to benefit from; improvements in the Custodian interface online user experience; bringing client instruction deadlines closer to market deadlines; enhanced client response levels based on the establishment of a new platform accessible 24 hours during trading days using the sub-custodian and MUFG’s global network (the ‘Follow the Sun’ model); and extending more competitive pricing to clients facilitated by the reduced cost of infrastructure amongst other cost efficiencies.”
3. What benefits will a white label solution bring for MUFG Investor Services?
“Our partnership with Citi will allow MUFG Investor Services to upgrade our core custody systems while also offering improvements in the online user experience for our clients, along with bringing client instruction deadlines closer to market deadlines and a ‘Follow the Sun’ service model. Combining our global Investor Services expertise with Citi’s best of breed knowledge of local subcustodian markets gives us the platform to provide comprehensive solutions and market-leading service levels to our clients.”
4. How will the solution interoperate with MUFG’s wider custody operations?
“In the area of domestic Custody & Clearing in Japan, MUFG Investor Services can utilise and take advantage of our prominent and market leading presence in supporting the intricate needs of our customers in development of services and solutions. In this regard, the change of our global subcustodian will be a win-win for both MUFG Investor Services and Citi.”
5. How can white label solutions impact the wider global and sub-custody landscape?
“MUFG Investor Services continually monitor changes in the global and sub-custody landscape, particularly those developments driven by infrastructure and regulatory changes. There is a noted trend in the industry toward custody outsourcing; white label solutions can allow Custody Banks such as ours to leverage the knowledge capital and expertise of a provider such as Citi in a sub-custodian network and systems and ensure compliance with the latest market practice, regulations and tax systems. This strategy aligns perfectly with our continued focusing on our own brand, value and building stronger client relationships.”