State Street has decided to reallocate its funds for bank transformation. Rather than keeping the budget safe for daily productivity, it will invest in strategies. The company’s Global CIO Brian Franz announced it during Morgan Stanley’s U.S. Financials, Payments & CRE Conference. So, out of the $2.4-billion technology spend, 55 percent of the expenses will be put aside for daily banking expenses. So, what else is the bank deciding for the coming days? What changes will the market see? In this article at CFO Dive, Grace Noto discusses with State Street’s CIO and CFO the bank transformation ideas.
State Street and Bank Transformation
Franz remarked how artificial intelligence and automation topped the advanced technology demand list for bank transformation. State Street will be further experimenting with cloud services. It will be moving its investment platform – Alpha – to a public cloud infrastructure. However, the bank is yet to let go of its legacy architecture.
Balancing the Market Demands During Bank Transformation
Eric Aboaf, State Street CFO and Vice Chairman, talked about the recent decline in the equity market and fee revenue. The global average for the equity market dropped by 7 to 8 percent. Additionally, fee revenue came down by 6 to 7 percent. So, to address the continuously changing demands, bank transformation is necessary. Per Seeking Alpha, the financial service’s current revenue is $3.06 billion. These prompted the executives to support the digital transformation initiative.
The Acquisition Confusion
Rest assured, State Street is not acquiring Credit Suisse, a Swiss bank. Financial News London informed that the rumor was initially posted on a Swiss blog, prompting an uproar and a dip in share prices. Both banks denied the acquisition hearsay. Credit Suisse Group CEO Thomas Gottstein also dismissed the claim soon after.
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