As one of the largest banks in the world, State Street commands presence. In recent months, the business had been strangely quiet about its digital asset ambitions.
At the end of August, that all changed when the bank announced details of a strategic partnership with digital asset infrastructure group Taurus. The deal will significantly enhance the bank’s digital asset solutions offering and puts the bank in a position of strength as its client base increasingly looks for guidance and services in this area.
“The collaboration with Taurus underscores our ongoing commitment to further establishing ourselves as leaders in this growing asset class, and this important announcement only enhances our ambition to deliver to our clients an amazing digital asset experience,” said Donna Milrod, State Street’s chief product officer and head of digital asset solutions.
The US bank plans to harness Taurus’s fully integrated custody, tokenisation and node-management solutions to automate the issuance and servicing of digital assets, including digital securities and fund management vehicles.
State Street intends to use three of Taurus’s products in particular: Taurus-Protect, Taurus-Capital, which streamlines the process of creating and managing tokenised assets throughout their lifecycle, and Taurus-Explorer, which provides blockchain connectivity to various different blockchain protocols.
While the partnership undoubtedly is a huge win for both Taurus and State Street, it will require both parties to look closely at their marketing and communications with their various clients, prospects and key stakeholders.
For State Street, the challenge will be communicating a brand new proposition to clients where some individuals will have limited knowledge of the solutions, let alone the broader themes of blockchain and tokenisation.
The individual in charge of managing that is James Redgrave, the bank’s head of digital thought leadership. Redgrave has been with the London branch of the US bank since January 2018 having worked on a host of digital marketing programmes along with various institutional investment content projects before that.
“At State Street, the thought leadership priorities and the business priorities are very much interlinked,” he explains.
“Among the majority of our client groups, we haven’t yet seen the widespread adoption of tokenised assets or digital currencies, so there is a need for education and to explain the benefits to those client groups that are keen to embrace new methods and approaches.”
Redgrave says that among many client groups the bank isn’t anticipating a “switch overnight” where everything moves to the blockchain and that will require the business to run services on twin tracks for some time.
“That said, tokenisation is being adopted at a faster pace by some client groups, and in some jurisdictions, than others so we must be able to offer clients service as normal and, in a tokenised or digital environment, be able to do it at scale, as regulations allow.”
With his responsibilities focussed on the research and written communications element of the bank’s marketing for digital assets, Redgrave expects the strategic agreement with Taurus to elevate the bank’s digital asset capabilities and underscore its ambition to deliver an excellent digital asset experience to the bank’s clients.
“It is early days, but the partnership gives us access to technical specialists outside of our own subject matter experts,” he explains.
“The difficulty with emerging technology, generally, is that you will always have some people who are at entry stage for the technology and you will also have people who are specialists in this field.
“For many of our clients, they want to know that we understand it. We have to show we have strong digital specialists within State Street and underscore that it is embedded in our service team. Bringing Taurus on board will reinforce our technical capabilities even more.”
For now, though, State Street is keen to ensure that its clients receive supportive education around the developing digital assets sector.
“From the feedback from our annual survey and quarterly digest newsletter we know that the market recognises there is a general absence of information in this space that speaks to buyside institutions about this technology,” Redgrave explains.
“Our survey is one of a small handful of research studies but it is conducted by an entity that is used to speaking to these kinds of institutions. We are committed to continuing to develop the industry education piece.
“What I hope will develop is, as use of tokenised assets become more prevalent among our client groups, we will be able to talk more tangibly about demonstrating the benefits as opposed to just talking about the hypothetical ones.”
As a former journalist, Redgrave is keen to draw comparisons with other mega trends in technology that are playing out across the financial services industry. One such trend has been the explosion of possibilities which have manifested as a result of artificial intelligence and generative AI, in particular.
“Anything that has transformative potential can be looked at in isolation but we prefer to look at the trend as
an entirety. Taking AI as the example, we have taken a holistic approach to assessing how these technologies operate with each other and the implications for cyber security, a component of managing a blockchain, of course.
“We are moving to technology across the range of operations that will increasingly work in tandem with one another.”
Segmentation and dynamics
State Street’s ambitions in the digital assets space have long been communicated within the institutional investment market, with several of its subject matter experts previously visiting or speaking at financial conferences around the world.
However, such is the growth in market innovation, the bank recognises that it will now need to go further, segmenting its marketing, its sales approaches and its communications to dedicated audience personas in a much broader set of groups.
“It is important to strike the right balance between making sure you are not frightening off new entrants to the market with things they don’t understand while also not providing a chief technology officer with something that is very rudimentary,” Redgrave explains.
“You need to get your distribution lists in order. A solid distribution strategy is key to making sure you are getting the right things to the right people.”
As well as the segmentation and distribution strategy, the thought leadership expert says that it will be important for the bank to consider the suitability of the content assets, too, if their messaging and sales enablement materials are to land.
“In terms of the content assets, we started doing webinars and Q&A type interviews when it comes to addressing new topics where we want to introduce ourselves as thought leaders. A sit down interview with one of our thought leadership people can make a topic quite straight forward.
“We can have our SMEs write longer more technical pieces for those readers who have appetite for long-form and focus in on a specific theme, where we feel it necessary,” he explains.
Beyond finance
Redgrave recognises that the speed of adoption of tokenised assets and blockchain technology more broadly does mean that the sophistication of content will need to increase over time.
“I expect that over time, the proliferation of less educated cohort will shrink and the sophistication of content will tilt towards the upper end. I think the collaborations we are talking about will obviously help to facilitate that.
“What will drive that is the move from ‘proof of concept’ stage to the ‘it’s happening at commercial scale’ stage. Once things become mainstream, and it becomes no longer a choice, there will be a herd move to technological literacy.
“When that happens, the thought leadership needs to catch up. It has to be informative. As a result, it is highly likely that the production of thought leadership will become more challenging.”