Adapt, Transform, Evolve – Providing Post Trade Services in Early 2020

Stephan Hänseler, Head Global Relationship and Network Management, and Sandro Heim, Head Relationship Management at the Swiss Stock Exchange, share their unique insights on how Covid-19 is reshaping the way post-trade providers engage with their institutional clients.

Looking back at the first quarter of 2020, can you give us an overview of some of the key trends you have seen in the Post Trade area?

S. Heim: We had very strong momentum at the beginning of the year, as more clients started to consolidate their custody and clearing mandates with us. On the back of further product enrichments, we also saw and actually keep seeing a notable increase of fund holdings coming in our direction. Once the significance of Covid-19 became clear in March, there has been a remarkable amount of volatility with a substantial upswing in clearing and settlement volumes as a result of heightened trading activity. Just to give you an idea, we saw over four and a half million domestic settlement transactions in March 2020, compared to just over half that in March 2019. Similarly, international settlements reached just shy of one and a half million in March 2020 versus almost six hundred and fifty thousand a year ago. Elsewhere, there were 58,863,095 cleared trades in March 2020, a massive spike from one year prior when that figure stood at 33,179, 085. So, as you can see, our clients, our people – and our systems – are dealing with circumstances that are quite extraordinary.

How has Covid-19 impacted your business from an operations perspective?

S. Hänseler: In relation to our own operations, we have implemented contingency plans, including mandatory remote or home working and split operations for our employees to ensure we can continue to deliver a robust and seamless service to clients. All employees in non-business critical functions are working from home. Business critical teams are divided into two – otherwise known as split operations. One part of the team will work from home, and the other from our offices in Zurich and/or Olten. This minimizes any risk of contamination and ensures built-in standby should anything occur.

The Covid-19 pandemic poses significant challenges to the industry. How are you helping your clients master them?

S. Heim: Firstly, we are fully supporting clients with their increased trading, clearing and settlement requirements as efficiently as possible. We are also helping users optimize their liquidity management processes, by providing them with additional information and resources through various digital channels. Moreover, we continue to support our customers when they enter into new markets or asset classes. Most significantly, our primary objective is to make sure clients can continue operating as normal during this extraordinary period.

How have you adapted the maintenance of client relationships to the situation?

S. Hänseler: Client interaction has obviously evolved over the past month. As we are temporarily unable to physically meet clients, we have been forced to adapt, and fast. Customer service and engagement is integral to success so we have been communicating regularly with clients through virtual channels and phone calls. It is essential that we continue to keep our clients fully updated and informed at all times and on all fronts given the fluidity of the situation. I personally believe that virtual and written communications with our clients will only intensify and become increasingly personalized. I am convinced that there is great potential to further optimize virtual communications with our clients. Post crisis, virtual interaction with clients might partially replace physical meetings thereby increasing efficiencies for ourselves and our clients.

How are you reinforcing staff morale at your own organization?

S. Hänseler: We have a duty of care to all of our people, which is why we see it crucial that our teams and colleagues stay in regular touch through video conferencing, for example. On the mental and physical well-being of our staff, we are conscious that some of our people may find self-isolation challenging, especially if they live alone. If I get the sense that a colleague of mine is struggling for whatever reason, I invite them to a virtual coffee break where they can sit in their garden or balcony for a few moments, step away from the pressures of work and have a chat with me. This is ‘space-making’ critically important for me. On an operational level, we have daily management team calls to ensure all parties are in agreement on major strategic issues. If for some reason there’s an internal disagreement, we are quick to intervene and facilitate a constructive dialogue.

What have been the biggest challenges so far and what lessons have you learned?

S. Hänseler: Our Business Continuity Management (BCM) programme was executed brilliantly by our teams, and the transition to remote working took place without any serious issues. This is evidenced by the fact that clients have not reported any disruption despite the record volumes of trading, clearing and settlement transactions being processed. This is testament to the strength of our infrastructure. Additionally, this crisis reinforces how important it is for financial institutions to constantly test their operational resiliency, and this is something the Swiss Stock Exchange has taken seriously for many years now across all of our systems in trading and – especially – in the post-trade areas. Moving forward, we need to maintain our discipline as professionals so can continue to deliver the same levels of excellent service. We also need to keep staff morale high as we don’t know how long this situation will last.

How do you think relationship management will evolve as a result of Covid-19?

S. Heim: I imagine in some instances that remote working will become more ubiquitous as Covid-19 has demonstrated that companies can function normally even if people are doing their jobs at home. In terms of relationship management, I anticipate there will be an initial flurry of activity and face-to-face meetings once the crisis is resolved. But I do also think that the door has now been opened for us to challenge the need for face to face meetings – which is a format – and to focus on the true meaning of our relationships.

How the Swiss Stock Exchange ensured fair and orderly trading during the Corona crisis is described in another interview with Christian Reuss, Head Cash Markets & Head Sales and Werner Bürki, Head Trading responsible for Exchange Operations: Open Markets to Weather the Storm.