2 July 2021
The executive takes stock of the impact of the pandemic on the sector, the challenges in the short and medium term and the new initiatives that Cecabank is implementing in its activity.
Recently appointed Corporate Director of Operational Services, Aurora Cuadros is a veteran at the depositary and custodian institution Cecabank, where she has spent eight years leading projects related to 'securities services' and the transfer of depositary business.
In a conversation with this newspaper, the executive indicated that she is tackling this new stage in a sector in which, in her opinion, consolidation at the depositary level has come to an end and in which the challenge now is to contribute to the diversification of disruptive initiatives, such as services in the 'cloud' environment and crypto-assets, as well as to convert Cecabank into the national hub for 'securities services', providing Spanish customers with access to international markets.
QUESTION. You have just been appointed Corporate Director of Operational Services, what are your objectives?
REPLY. The bank's strategy for the future in the coming years is based on two axes. On the one hand, the transformation of the entire automation process in order to be more efficient; on the other, diversification with more disruptive initiatives, such as international presence and positioning, the custody of crypto-assets and the evolution of the products we are already offering our customers in a 'Software as a Service' (SaaS) framework. The goal is to enhance the added value for our customers through the provision of new solutions. The key is to evolve our services as a 'partner' around our 'core' business, which is the custody, settlement and depositary business.
Q. What are your medium- and long-term challenges?
R. We are Spain's leading depositary and custodian bank and this entails a very significant responsibility in terms of custody volume and assets, which implies maintaining BAU ('Business as Usual') management, that is, of our day-to-day operations.
But we cannot remain there, because we would not grow. In this respect, we have to monitor market trends and, in parallel to the management of day-to-day operations, be capable of taking an innovative approach, which is a fundamental challenge. To this end, we have developed a series of strategic initiatives that complement the value chain of the operational services division and ensure that 'time to market' is as short as possible for our customers and, above all, allow us to move forward. These strategic initiatives have to go hand in hand with our customers so that we can always meet their needs and, of course, provide them with timely responses.
'Strategic initiatives have to go hand in hand with our customers so that we can always meet their needs".
Q. As a SaaS provider, what are you working on?
R. This is one of the challenges that is part of our strategy for the future. What we currently provide our customers is a very 'ad hoc' platform that allows them to increase the marketing of their products, such as investment funds, pension plans, among others. Everything from the end customer's portfolio. The idea is to create a platform, not so much at the project level, which results in very long lead times, but focused on the product, so that it is a homogeneous platform for all our customers.
As the largest depositary, this platform would be a kind of supermarket for all our fund managers where their products could be marketed and where they could take advantage of the benefits of other customers that work with us. For all this to be done quickly and efficiently, we would have to move towards standardisation, to ensure that this is accomplished in the shortest possible time.
Q. In relation to digital currencies, different central banks are working on the issuance of their own virtual currencies; What is your assessment?
R. Several central banks are currently working on the issuance of their own digital currencies, such as China and Sweden. As for the specific case of the euro, the feasibility of the issuance is under study, but we believe that it is a project for the future. However, there is still a long way to go in terms of regulatory development. Cecabank is part of the 'smart money' sector initiative in collaboration with Iberpay, where we are currently conducting a proof of concept. A total of 16 institutions are part of this project, which goes hand in hand with the Bank of Spain.
Q. What other initiatives are you working on?
R. We are working towards becoming the custodian and depositary of crypto-assets. We believe that, on the one hand, because of our specialisation and, on the other, because of our regulatory knowledge of the custodian business, we offer differential value that will enable us to develop in this field.
Q. How has the pandemic impacted Cecabank's activity?
R. We have been able to adapt to this unexpected, uncertain situation with distinction. Firstly, because we were able to design an action plan that highlighted something that was commonplace for many organisations, but not for us at the time, a new way of relating to each other: teleworking. Not only were we able to adapt to this new form, but we had a number of commitments to honour during 2020 that were necessary because they had a direct impact on the company's bottom line. I am referring to consolidating major successes such as an increase in the number of customers and, therefore, a significant increase in business.
In this uncertain situation, we carried out the transfer of the depositary of Kutxabank's vehicles, we transferred the first Portuguese depositary client, which was BPI, we closed Bankia's contract, and we worked on the entry of tripartite customers in a fairly generalised manner. Therefore, in this period of confinement, what it has honestly meant is that we have had to adapt as an organisation and continue to consolidate our position, attracting business as a market leader, which is why I have said that Cecabank did so with distinction.
Q. What improvement processes have been implemented following the pandemic?
R. We were already working to this end before the pandemic, but the situation confirmed that this was the direction we had to take. I am referring to working transversally. In order to succeed with each new business entry, each new customer, we have to work across groups in support of the specific team within each area. This approach ensured that, even though we were not physically working in the same place, nothing was delayed in relation to the initial planning. In addition, within the transversal teams, each of the individuals who form part of them became involved in a very positive way. Transversal groups are undoubtedly the key to success.
'In the depositary business, consolidation has peaked: in 2008 there were 150 depositaries in the Spanish market and today there are less than 15'.
Q. Consolidation is taking place in the depositary sector, how much further is it going to go?
R. In the depositary business, we believe that consolidation has almost peaked. In 2008 there were around 150 depositaries in the Spanish market and today there are less than 15, and in truth there are five major depositaries. As of today, there are very few significant operations remaining at the national level.
This, however, does not occur in the custodian segment, because there are a series of specific features in the custodian business that are very different from the depositary business, which means that nationally we still have a lot of room for manoeuvre in the custodian segment. Furthermore, we want Cecabank to consolidate its position as the national 'hub' of 'securities services', in which it provides Spanish customers with access to international markets.
Q. What are the challenges facing the sector?
R. In the depositary sector, the consolidation process has come to an end at a national level, which leads us to move towards another way of doing things, towards new products, to go outside our perimeter. To do this, we must implement disruptive solutions that go beyond merely maintaining the business, and we must strive for growth. In order to grow, what you have been doing up to now is not enough; you have to go one step further.
