After acquiring Charles River last year, State Street is in the process of deepening the integration of Charles River’s systems with the bank’s wide-range of products by developing a single master file of securities data, thus creating a seamless front-to-back offering.

State Street has completed the base integration of Charles River’s systems and is now in the process of finding new and more effective uses for it, says Dick Taggart, head of front to back platform services for State Street.

“Having it all in the same house allows you to make integrations tighter. This means you can make sure things like the Security Master that you both use is now fully in sync; so you’re never going to have a difference on a CUSIP number, for example,” Taggart says. “We can make sure those things are perfectly in sync because we control both ends of the pipe. Ditto for information coming back about the status of a trade or dividend or piece of collateral—we can now hardwire that right into the Charles River platform in a more integrated way than before.”

The benefit of this is that when a user recalls data between two platforms, the results coming back will be updated in real time, as opposed to there being a lag. This, they hope, will provide an environment to make better investment decisions. Taggart notes that having real-time information built off of the same security master—which is a golden source of data for trades, positions, and securities of clients—allows people to have a better handle on the true state of accounts.

State Street announced its acquisition of Charles River in July 2018, with the deal closing three months later. Recently, the bank announced that Lazard Asset Management—a long-time client of both State Street and Charles River, but using separate services—entered into a letter of intent to sign State Street as its front-to-back investment servicing platform.

The point of acquiring Charles River was to link their front-office order, execution and portfolio management expertise with State Street’s analytics, risk, and middle- and back-office functions. If successful, it can create a one-stop-shop environment for buy-side firms.

Taggart points out that many clients of both State Street and Charles River use a combination of platforms to run their businesses—i.e., Lazard uses Charles River for front-office activities and State Street for middle- and back-office functions. The idea is to connect all the pieces together and offer one comprehensive suite of services, so if a client uses Charles River for its front-office systems and State Street for custody and accounting, the same data will flow between the various platforms.

State Street is also looking at a creating a data management service that pulls together all data generated within its systems, including CRD, and stores it. Taggart says this allows State Street to essentially act as a data custodian.

“Another project is the data management service. In many cases, investment managers today have a complicated environment with many software or service providers, data stores, data lakes or data warehouses, where they aggregate all this data, which they have to integrate, cleanse, and align themselves. We’re now able to do all that for our clients—we can pull all that data together and make sure it’s accurate and complete, end-to-end, and effectively be the clients’ data custodian,” he says.

Taggart points out that though State Street is looking towards a more seamless connection between all of the platforms it runs, it is still committed to providing an open architecture to clients, should they prefer other third-party solutions. He says State Street offers APIs to easily integrate a clients’ preferred data source or risk model within its own system.