Distributed Ledger Technology

State Street’s Enhanced Custody business enables our clients to borrow and finance securities directly with State Street within a segregated custody account.  Enhanced Custody provides a unique channel for financing, while giving clients visibility and control over their assets.  It is a fast growing business that we started back in 2010, and is now accounting for ~50% of our securities finance revenue line item.  The business relies on 4 core applications, with 10+  supporting applications, to custody client assets and perform the day-to-day securities lending, borrowing and monitoring activities.  There are multiple books of record that must be maintained in this environment.  The new business process being developed relies on a shared ledger – i.e. distributed ledger technology – to maintain an accurate and highly secure state of the asset.  This shared ledger will eliminate the need for reconciliation, reduce costs, and speed up the process.  As we begin, we are working to develop the network in house. A further step would be to extend access to the network to external parties.  We recognize that DLT has transformative potential for custodial banks, such as ourselves, and we plan to be at the leading edge of that change. This will drive change to our operating models, and create new value for our clients.

Chief Technology Architect and Senior Vice President