KAS BANK wants to be the best administration bank in 2020. In order to achieve this ambitious goal, we must make clear choices. And that is what we have done, says Sikko van Katwijk, Chairman of the Managing Board.
"We are working to transform ourselves into a network bank that forges relationships with specialised providers of specific
services in order to continue to service our clients optimally."
05 Nov 2016
Change is a necessary ingredient for progress as ‘the only thing that is constant is change’. At KAS BANK, this truth has been abundantly clear for 210 years already. Markets and business models have been changed and adjusted many times over the past, let’s say, 100 years. Parties that anticipate and respond to those changes on time manage to stay afloat the best in an environment that is constantly in flux.
Disruptive changes are once again taking place on the market at the moment. The rise of highly specialised niche companies (e.g. Blockchain and Fintech) are putting traditional bankers under even more pressure. If you are following developments closely, you see the changes coming timely. Then you can adapt your earning and business model on time accordingly. That does not always bear fruit immediately, but it certainly pays off in the long term.
Nowadays reporting and complying with laws and regulations is becoming more and more important. We anticipated to this change with setting up an EMIR tool for institutional investors to report their derivatives to the new Trade Repositories in Europe and other independent reporting tools to satisfy the ever growing supervisory requirements.
We strongly believe in the added value of an independent custodian
Meanwhile, KAS BANK’s DNA largely remained unchanged. Safety first, never lend money without sufficient collateral, harbouring a low risk profile, no proprietary trading and always acting in the best interest of our clients. One thing has changed dramatically, however. In our sector, clearing and settlement has become a commodity. Securities transactions are settled virtually STP without human involvement. This puts prices and margins under pressure throughout the securities sector affecting business models at both KAS BANK and the entire securities industry. Commission income is declining, while the share of income from fee-related activities is becoming more important. A modern custodian does much more these days than purely safekeeping and transferring securities, therefore.
It provides added value in the form of collateral and risk management, tax refund claims, optimising dividend and coupon receipts and all sorts of other administrative services. But it also provides reports to regulators, collects, unlocks and analyses data and ensures that new laws and regulations are implemented on time. Taking over and performing investment administrations is the next logical move, thus providing clients with a full-service solution that enables him to fully focus on its own core activity.
Institutional investors are responsible for the future income of millions of people. Therefore, they are looking for scale to improve their investment administration, work more efficiently and comply with laws and regulations. They too realise that continuing to do ‘business as usual’ imposes limitations on their organisation. They too want to concentrate on their own core activity by outsourcing tasks to a ‘trusted administrator’. But they also want to feel secure in the knowledge that the work being outsourced is performed by an independent party that does not compete with them. A party that is flexible and can scale up its operations if necessary. A party that knows what it is talking about because it has a thorough, in-depth knowledge of the client’s needs. In short, an independent administration bank.
Being a ‘trusted administrator’ perfectly fits with the strategy and mission of KAS BANK. In order to perform this role optimally, we must make clear choices. Custody remains the solid base for our operations. Our engine, however, will be transformed into a network of specialised providers of specific services through which we continue to serve our clients optimally and to ensure that you are always in the ‘driver’s seat’.
I am proud that every one of our employees is working hard to achieve our goal to become the best administration bank in 2020. The market offers every opportunity to do so. But ultimately, it is of course about your experience as a client of the bank. We want to walk the path we have chosen together with you and involve you closely in doing that. By developing new products and services tailored to the needs of your organisation and the market together. But also by constantly explaining what we are working on.