2012 Top International Operations Executives
2012 TOP INTERNATIONAL OPERATIONS EXECUTIVES:
The More Things Change, The More They Stand Out | DIANA CHAN: Shaking Things Up, In European Clearing | CHRIS REMONDI: Increasing Information, Reducing Risk | NEERAJ SAHAI: Marrying Large-Scale Technology With Boutique Service | KEVIN MILNE: Making an Exchange Succeed By Working With Rivals | THOMAS ZEEB: Gold Standard in Securities Processing | CHRISTOPHER JAYNES: Cutting Out the Custodian Bank | PATRICK COLLE: Going Global, But Not Everywhere | TONY FREEMAN: Targeting Two-Day Settlement
THOMAS ZEEB: Gold Standard in Securities Processing
December 19, 2011
At the outset of 2008, Zeeb was approached by the SIX Group, which had just been formed by the integration of the SIS Group, which was a custody and securities processing business, the SWX Group, which operated the Swiss Exchange, and Telekurs Group, a market data supplier. The head of SIS wasn’t going to stay on and Zeeb moved in as head of the post-trade business that was renamed SIX Securities Services.
One of his first initiatives in his new position was to make sure an existing innovation got exploited fully. This was the “automatic realignment” of securities.
This purpose was to make sure that SIX’s customers bought securities in the cheapest place they could. And then held them in the cheapest place that made sense. That could depend, for instance, on pending transactions and historic activity in the security in question.
The realignment got calculated by an algorithm, almost like trading, which figured out the “most cost-effective location” for, say, shares in Siemens AG, the German technology firm.
For SIX Group, Zeeb’s challenge is to increase the cross-border and cross-culture business of the securities processing business. Right now, only 30 percent of its asset base is outside Switzerland. More than 50 percent of its clearing business, however, is.
But clearing prices have come down 90 percent in five years and settlement prices 60 percent.
This is putting a premium on finding more and more customers outside Switzerland, just like Vevey-based Nestle did a century ago in food products. In 2010, for instance, SIX Securities Services’ cross-border settlement transactions increased by 16.7% to CHF $6.6 million. But the total quantity of settlement transactions decreased from 28.8 million to 23.4 million.
SIX Securities Services, overall, saw its revenue grow 6 percent in 2010, to $280.8 million, from $264.1 million in 2009 and forecasts “a slight increase in revenue.”
Which, in Zeeb’s world, means you don’t necessarily grow revenue, even if you grow activity. Unless you automate. And innovate.