Calling it a “year of transformation,” DTCC CEO Michael Bodson took a moment to reflect on DTCC’s performance and accomplishments in 2013 before turning his focus to the company’s top corporate priorities in 2014 and beyond during the second-annual DTCC State of the Organization. DTCC Executive Chairman Bob Druskin joined Bodson in delivering remarks via video broadcast to about 2,500 employees at 18 locations in nine cities around the globe.
Bodson said that while 2013 was about making fundamental decisions on the future of DTCC and setting the vision for the future, “in 2014 we will start to execute on that vision.”
The State of the Industry
Bodson opened his remarks with an overview of the challenges the financial industry faces as it evolves and adapts to a radically different economic, political and regulatory landscape. This new paradigm has made business and operating models of the past unsustainable in the future – what Bodson called an “inflection point” for the industry.
“Financial firms are increasingly looking to market infrastructures like DTCC for new products and services that will help create cost and operational efficiencies and reduce risk in all its forms,” he said.
Strategy for the Future
Bodson said DTCC has a twin strategy moving forward to support the industry:
- Strengthen its core clearance and settlement services and extend into logical adjacencies to reach new client and market segments and serve a broader range of asset classes, and
- Collaborate, partner and cooperate with other infrastructure organizations to expand the shared-services model and provide clients with a more expansive set of capabilities that will enable them to reduce their costs and risks.
“We are working with our colleagues across the industry to mutualize certain non-competitive, non-revenue generating in-house processes performed by the industry,” Bodson said. “We are exploring how to replace these processes with standardized, automated, larger-scale shared processes that are capable of providing common risk management and significant efficiency and cost savings.”
Bodson cited several large, dynamic, global initiatives that DTCC is currently working on that will require an unprecedented degree of collaboration and coordination among industry-owned infrastructures, such as a new Client Reference Data platform, Standing Settlement Instructions Utility, which leverages Omgeo’s ALERT, and Margin Transit, which is the first step in developing a Collateral Processing Platform.
“It is critically important that as we pursue these initiatives, we must remain focused on consistently delivering high-quality products and services to our clients, soliciting their feedback and opinions and treating them with the utmost respect,” Bodson said.
Looking Back At 2013
Bodson said that while 2013 did not bring the same seemingly never-ending wave of crises like 2012, such as Superstorm Sandy, DTCC had a significantly stronger year by making key advances in:
- Enhancing the company’s risk management capabilities,
- Successfully recovering from Superstorm Sandy,
- Launching new business lines and products, and
- Executing an unprecedented number of corporate transactions to sharpen the organization’s strategic focus and strengthen its balance sheet in order to invest in new initiatives.
Druskin focused on steps DTCC is taking to strengthen employee capabilities and engagement as well as the link between culture and performance, explaining that the two “are inextricably linked.” However, Druskin noted that corporate culture also needs to be adaptive so that companies can evolve over time to stay competitive.
“While change can be difficult at times, it is essential that all employees embrace and help drive organizational transformation to ensure that DTCC remains competitive and can continue to seamlessly execute while expanding its role in the industry,” he said.