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EXCLUSIVE: BNY Mellon's Pershing Aims For EMEA Winning Formula

Tom Burroughes

5 June 2023

BNY Mellon’s new CEO for its business, Cécile Nagel, is a person well-used to organisations that have to embrace rapid change and work with those whose business models are getting disrupted. WealthBriefing caught up with Nagel at the firm’s offices in the City to ask her about her vision for the business. The EMEA role that Nagel has covers the UK, the Channel Islands and Europe (from the Irish office). 

Nagel joined the firm in 2022 and was previously CEO of EuroCCP. (From the Pershing website: Under her leadership, EuroCCP consolidated its position as a leading pan-European cash equities central counterparty, providing clearing services to 47 trading venues across Europe. In addition, she led the launch of the equity derivatives clearing service and oversaw EuroCCP’s acquisition by Cboe Global Markets in July 2020.) Before this, Nagel was with the London Stock Exchange Group (LSEG) where she held several senior positions across the organisation including head of LSE Markets Global Product Development and Exchange Traded Products, group head of Strategic Planning and global head of Equities and Commodities at LCH, LSEG’s multi-asset clearing house. She has also worked at Oliver Wyman and the Financial Services Authority (now the Financial Conduct Authority). 

WealthBriefing: Whom do you look to (other firms, individuals, authors, public figures etc) for inspiration and ideas? 
Nagel: I grew up in Alsace, in Northeast France, in a small village near where Arsène Wenger grew up. While our industries are very different, I see a lot of his journey in my own. He had to work hard to get to the top; his talent and success are something I admire a lot. 

Much of what he achieved in his career has a bearing on the role I hope to play at Pershing, from overseeing pioneering change in the wealth management industry (his use of data and analytics in football was a real step-change for the game), to building successful teams and effectively leading across different countries and cultures. I fear this won’t make me popular with Pershing’s Liverpool-based Operations team…! 

Your background in areas such as the stock exchange,the clearing house world and Oliver Wyman gives you a variety of experience (and of course you’ve also worked with the UK regulator). What benefits does this experience give you in your role?
I’m fortunate to have worked across a number of industries within the broader financial services sector; the element that ties all of these roles together, and which I believe is integral to my role at Pershing, is a deep understanding of market infrastructure in the UK and across Europe. 

In my previous roles, I’ve also led strategic initiatives and worked through some of the most defining periods in the history of global financial services. Technology change, regulatory change, consolidation and M&A have all had a profound influence on the industry’s transition to its current form; for wealth management in particular, they are now at their most apparent and impactful. 

Being able to respond to change, and capturing opportunities that emerge, is critical to our success. There are a lot of opportunities to grow Pershing in EMEA and I’m excited to be leading the business on this journey.

What in broad terms do you see as the opportunity in front of Pershing in the EMEA region, and are there particular jurisdictions you want to discuss and why? 
Pershing has a longstanding heritage and is trusted as a business partner for institutions in the EMEA region, with established bases in the UK, Channel Islands, and Ireland acting as our gateway to supporting mainland European businesses. Through this longstanding experience, coupled with the diverse range of clients we serve, we have gained an extensive understanding of the challenges faced by the wealth management industry. Despite the tremendous growth opportunities in this sector, wealth managers are still struggling to grow profitably and sustainably. We believe that there are three key drivers to support them:

i.    Bring simplification to an increasingly complex environment; 

ii.    Help to build scale so they can grow their revenues faster than their cost base. According to a Compeer report, over the past five years only 37 per cent of UK wealth managers have been able to grow their revenues at a faster rate than costs. Outsourcing to firms like Pershing offers an obvious way to scale without having to worry about technology resiliency, risk management, or regulatory burden; and 

iii.    Last, but certainly not least, provide them with innovative solutions so they can focus on their clients and differentiate on service. 

Simplification, scale and service are the cornerstone of our strategy to support our clients, underpinned by strong core capabilities and resilience.  

We have seen a lot of volatility in financial markets and attendant woes of certain banks. How has this affected what clients are looking for from a firm such as Pershing when it comes to custody and other services?
When market volatility surges, clients want to know that the companies looking after their clients’ assets are strong and resilient. The resilience and stability of our platform – backed by the credibility and strength of BNY Mellon (the world’s largest custodian with over $44 trillion of assets under custody/administration) – presents a differentiated value proposition. Recognised as a Global Systemically Important Bank, we are subject to stringent capital and liquidity rules and stress tests that complement our rigorous approach to risk management. This provides reassurance to clients during volatile periods and means that clients in the UK and across Europe look to Pershing with confidence, trusting in our ability to look after their assets.

Within the range of services that Pershing offers to wealth managers (tech, investment and platform solutions, clearing, trading) where do you see the most growth potential? What areas do you think require more development and investment? 
The wealth management industry is growing rapidly supported by strong underlying dynamics and changes to the pension and investing landscape, and it comes with a greater demand for advice from individuals. Financial literacy remains far too low. 
We pride ourselves on being able to offer fully-integrated trading through to custody services as well as a range of investor services and investment solutions. As a result, the whole range of Pershing’s services has potential for firms that want an infrastructure that can power their growth. We also continue to develop our offering to bring further efficiency and scale to wealth managers and solve pain points such as investor onboarding or smoother transfer of assets using digital tools. We recently expanded our product range with further enhancement to our SIPP. 

Can you disclose some of your wealth management clients in EMEA by name?
While we have a duty of confidentiality to our clients and do not disclose names, we have a wide range of clients across many segments including independent financial advisors, discretionary fund managers and platforms, across multiple jurisdictions. Further, we are able to fully leverage the broader BNY Mellon capabilities in asset servicing, clearance and collateral, treasury and investment management to support our clients’ needs.  

Can you give a sense of how new tech areas such as AI, blockchain etc are driving change in your firm and how much of this is overhyped? Are there technologies that are “under the radar” and deserve to be talked about more? If so, any examples? 
The wealth management industry is spoiled for choice when it comes to wealth-tech and advice-tech solutions. There has been a proliferation of startups and significant investment in new tools and technology that can make it very complex to select and integrate with the right providers. Some of the new solutions available may be attractive but the current level of fragmentation is not sustainable. 

As mentioned earlier, one of Pershing’s key strategic drivers is simplification. In the US, our Pershing  X platform is focused on delivering a comprehensive all-in-one fully-integrated set of advisory capabilities to Pershing’s clients by solving this integration problem. In Europe, in addition to our deep integration with Objectway, providing our clients with high front-to-back productivity, we continue to invest in new capabilities and explore new partnerships to enhance our services.

When wealth managers/private banks and others are in the market for new solutions, and they look at Pershing, how does the firm approach the whole “beauty parade” process of pitching its wares? And once it is chosen, how does it set expectations with clients, explain implementation, measure the “success” or otherwise of a project, etc? 
Our clients have always praised us for our integrity and, as such, our approach from the “beauty parade” state to implementation is consistent. We do not over-promise and under-deliver. Quite the opposite.

We take a consultant-partnership approach with our clients and prospects. Most know what they want, but not necessarily how to achieve it or what that process entails. It is our responsibility to work with them to truly understand their needs, and what is most important (quite often, new considerations emerge that were not mentioned in the initial RFPs!). We agree milestones with clients and implement a strong governance process to ensure smooth and safe migration and client satisfaction throughout.

We prioritise building relationships with the teams we will ultimately work with. Our prospects are talking to the same people who will be responsible for their account handling at Pershing; building that relationship early is instrumental to a successful implementation process. 

We also offer clients the opportunity to perform enhanced due diligence, including a chance to visit our operational centre of excellence in Liverpool, which is the home of our Operations team. As security is of vital importance for our clients, we also provide them with an overview of our Cyber Technology Operations Centre (CTOC), based in New York. This flagship CTOC has a 110-ft.-long curved video wall that provides real-time key performance data and information across our technology infrastructure, applications, business transaction flows and security threats. What’s more, we send our teams to our clients’ offices on go-live date, for on-the-ground, on-the-day support with the long-term relationship in mind.

What in your view is the medium-term outlook for services such as yours, such as outsourcing, the need for cost control, impact of consolidation/M&A, etc?
The industry continues to face myriad pressures. From continued consolidation, expansive regulatory requirements, growing pressures on efficiencies and margin, to the evolving demographic shifts and rise of technology – the wealth sector has much to contend with. 

I mentioned scale as our second key strategic driver. Via outsourcing, we are able to provide our clients efficiency and scale so that they can focus on growing and developing their business, while maintaining high levels of client service and fully functioning operations. 

We take on onerous, time-intensive tasks on a clients’ behalf (such as regulatory and compliance requirements and critical portfolio management functions), allowing them to focus on servicing their clients – their bread and butter. Simultaneously, and as required, we support them with the key transformative changes at a business-wide level which will equip them for future growth, such as technology transformation, which requires a best-in-class strategic partner for execution.

Against a backdrop of further consolidation/M&A, technology and regulatory changes, as well as increasing client demands, we see no slowdown in demand for the type of services and solutions we provide. 

How many people work at Pershing in EMEA and what is it in total? Any hiring/recruitment goals this year/2024?
Since joining the business, I have been extremely impressed with the diverse perspectives, skill sets, and backgrounds we have across the company. We are proud to have a diverse and talented group of employees, with a team of 500 plus across EMEA. Of course, we recognise that the industry continues to evolve. We have ambitious development plans and therefore we continue to invest in our people. 

Thinking about your role five years from now, what will “success” look like to you and your colleagues? What metrics can you use to judge this? 
I joined Pershing to lead the growth of our business in the EMEA region. While we have laid good foundations in EMEA, there is significant opportunity for our business to grow further. Our immediate focus is to cement and deepen our position in the UK market – building our relationships with wealth managers and supporting them on their journeys. Medium-term, we want to build on our existing presence in mainland Europe, using our expertise through our Dublin office to both support UK-based managers to grow in Europe, as well as supporting Europe-based managers to expand in their markets.