The Right Touch In Emerging Markets

Standard Chartered Bank’s head of Securities Services, Margaret Harwood-Jones, talks about how the bank uses its global platform to help build stronger markets in Asia, Africa and the Middle East.

Global Finance (GF): What is it that makes Standard Chartered Bank the World’s Best Sub-custodian Bank?

Margaret Harwood-Jones: Standard Chartered has been present across Asia, Africa and the Middle East for over 150 years. Our commitment to driving commerce and prosperity across our footprint has enabled us to forge long-term relationships with local regulators, market infrastructures and market participants. This positions us to be the eyes and ears of our international clients and support their investment needs.

In addition, we are unique in having a single-global-instance custody platform enabling us to deliver a consistent service across our footprint. Our “single touch” capability connects international custody clients’ securities accounts directly to domestic proprietary markets. This facilitates a shared ledger between the hub and settlement markets, eliminating the need for the traditional double hop that results in increased delays and settlement risk.

Ultimately our network, knowledge, people and technology, combined with placing the client at center stage, have gained the trust of our clients. This is reflected in the fact that we are on track to doubling the size of our business by 2021.

GF: What has your experience been with Bond Connect in China?

Harwood-Jones: Standard Chartered has been leading efforts to design and deploy Bond Connect since before its official inception in May 2018. We were the first bank to begin working with the Hong Kong Monetary Authority, Hong Kong Exchange and Chinese authorities to build a model that would benefit global investors. In the first week of trading, we facilitated 12% of the weekly RMB6 billion [$903.1 million] turnover through leading clients such as Manulife and GF Asset Management.

Importantly, during that time we were also meeting with leading fund regulators in Luxembourg and Dublin in order to ensure a swift and seamless acceptance of Bond Connect in the crucial UCITS zone, where a majority of investment flows will eventually originate. In the months following launch, we completed roadshows to eight leading renminbi-investment centers globally—leading to our official position as the No. 1 bank on Bond Connect.

Lastly, we have established and chaired the UCITS Bond Connect working group in Hong Kong as the official forum for discussion on future development of this key channel. Today we support market turnover of over RMB5 billion per day; and we continue to lead innovation in many areas (including international renminbi adoption, best execution and delivery versus payment, or DVP).

GF: How are you meeting the challenges of operating in the emerging markets of Africa?

Harwood-Jones: The financial systems of most African countries have experienced substantial improvements over the past decades reflected in the growth in number of stock markets, from seven in the early 1990s to 30 today. Standard Chartered has been at the center in driving this growth amid the political, economic and regulatory uncertainty.

With our unique network, we are able to combine deep local knowledge with global industry expertise; but to truly thrive in African capital markets, we have had to build relationships for the long term with our brand promise: “Here for good.” We not only invest in the sustained collaborative relationships that we enjoy with our clients, but also carefully cultivate those with the market regulators and infrastructures and local industry communities.

We distinguish ourselves in emerging Africa through using our expert teams to drive market development toward safe and efficient markets that allow us to deliver the innovative products and service that our clients have come to expect across all 40 of our custody markets in Asia, Africa and the Middle East.

In order to operate effectively in a fast-changing and uncertain environment, the ability to rely on our global operating model has been key. Leveraging a single global custody platform with robust operational, risk and product standards and frameworks has enabled us to provide a consistent service to our clients.

Ultimately, deep, transparent and accessible financial markets are key to supporting growth across Africa.