Securities Finance Monitor’s Anais Schmidt spoke with Sunil Daswani, the new global head of securities lending at Standard Chartered Bank, on ESG, industry change and client customization.
Anais Schmidt: What are your clients saying about ESG?
Sunil Daswani: ESG has become a priority amongst our clients. Our clients are aware that well-managed companies that operate in a sustainable way are more likely to be successful in the longer-term and be more resilient in a crisis. There is also growing awareness of the impact of poor ESG performance on reputational risk. Each client has their own ESG priorities which may differ, however clients are looking for segregated securities lending solutions to have the ability to customize and tailor their priorities.
AS: I’ve heard you speak about the need for industry change in securities lending. What kind of change do you mean?
SD: First and foremost, clients need to be able to customize as much as possible. This revolves around the pooled programmes where clients can’t customize vs. the segregated programme we offer. We’re also at an exciting turning point in the investment management industry and the future of securities lending for other reasons besides ESG, for example the role of technology in creating an entire new set of alternatives for clients. Beneficial owners need the flexibility to run an individualized securities lending programme as opposed to operating in the traditional pooled programmes.
AS: And where do you see the next phases of industry change?
SD: The next phases of industry change will come from structuring and managing securities lending programmes for beneficial owners. This means greater visibility and flexibility in established markets and growing securities lending activities in emerging markets.
Bespoke solutions cannot be confined to the largest players nor sacrifice cost or processing efficiencies. Technology will increasingly allow our industry to scale through automation and digitization. This will change the status quo. The ability to create value-added services that deliver greater choice and control is key to market evolution.
AS: What kind of success has Standard Chartered seen since the inception of your securities lending product?
SD: We were awarded the first piece of business last year in October and went through a large implementation with a government entity, going live in February. Our pipeline is exceptionally strong. It’s great to be part of such a successful team to date.