DEUTSCHE BANK
successful for the bank and its clients, but can also help Cayman establish itself as a centre of excellence for custody services on the international stage.
Client-driven service Within the Caribbean, the new custody service is a tactical expansion
of the range of products for financial intermediaries in particular— indeed, it was significant demand from these intermediaries that really drove the development of the enhanced custody offering. Most financial intermediaries—fund administrators, trust companies, family offices, law firms, accounting firms, liquidators—demand a strong service provider with global capability, so a locally available custody service in Cayman backed by a global banking organisation is an attractive proposition for them.
The addition of custody and safekeeping to our Cayman product
range, therefore, enables the bank to deliver a much more holistic offering, providing clients of our Cayman office with a complete suite of services. For example, through the bank’s global network, financial intermediaries can access securities settlement services in more than 100 markets. In addition, the prerequisite in today’s markets for asset owners and managers is the capability to offer comprehensive reporting tools, which must work in concert with their custody and safekeeping services— our custody offering delivers this.
Time zone Another key operational challenge faced by clients is, often,
that of differing time zones. With custody business previously being booked through other centres in Europe, a lot of executing brokers, quite understandably, didn’t want to deal with a custodian who was five or six hours away.
This is important for underlying clients of the financial
intermediaries we support from Cayman. Latin America, for example, is a growth region for many of our financial intermediary clients. Trust companies setting up Cayman and British Virgin Isles (BVI) structures for their Latin American clients are increasingly looking for a high quality offshore custodian as well.
While in the past finance firms have preached about asset
diversification, today we are seeing a shift, as wealthy individuals, families and institutions talk more and more about jurisdictional diversification. Having accumulated a significant volume of assets and seen that they’ve done well in terms of diversifying their portfolios, they are now asking whether it is safe to keep all their eggs in one jurisdictional basket. The recent US credit downgrading, for example, has sparked this sort of concern among treasury brokers, who are now looking for an extra layer of protection.
Cayman must be ready to make sure it is part of the jurisdictional
decisions they make, and having a strong custody industry can be a key part of that.
Local access to global expertise Understanding the needs of the local client base and what services
they require is absolutely vital for any business and is certainly at the heart of Deutsche Bank’s launching a complete custody service in Cayman. In a world where jurisdictional competition is getting greater and greater, it is important for Cayman that wide-ranging, high quality services are available locally; having a strong custody element in its armoury can certainly play a part in positioning Cayman as a leading finance centre.
“While in the past finance firms have preached about asset diversification, today we are seeing a shift, as wealthy individuals, families and institutions talk more about jurisdictional diversification.”
In addition, institutional clients absolutely demand that their
financial service providers have multi-jurisdictional reach. So while clients desire a locally accessible service, they also want that service to retain a global dynamic into markets such as Singapore, Sao Paulo and Mumbai, and to be backed up by an international organisation. When it comes to tier one banks, there was previously a small number of options in Cayman for custodians that had the kind of global reputation and strong investment banking name for which high net worth individuals, families and multinational companies were looking. In that respect, Deutsche Bank’s global reputation for custody solutions can play an important role in attracting high quality custody business to the jurisdiction.
We are confident that this new custody service in Cayman is
an area that can grow over the coming years and that it has the potential simultaneously to help our clients grow. The Cayman financial intermediaries we service employ many local people, and their businesses contribute a significant amount to the overall local economy. By supporting them as best we can, and providing the services they are telling us they want—such as custody—local financial intermediaries can also prosper.
Dan L. Peterson is business development manager at Deutsche Bank (Cayman) Limited. He can be contacted at:
dan.peterson@
db.com
Dan Peterson focuses on developing the bank’s FIM business in the Caribbean and providing senior-level strategic support to intermediary clients, drawing on the bank’s global strengths to bring appropriate, innovative solutions to the Cayman office’s captive insurance manager, trust company and fund administrator clients. With 11
years’ international banking experience, Peterson joined Deutsche Bank’s private wealth management division in 2007 and coordinated the successful launches of several key additions to Deutsche Bank’s Cayman offering, including the foreign exchange desk and custody platform.
CAYMAN FUNDS | 2012
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