In an age when many financial services companies are facing strong revenue headwinds, Northern Trust is quietly continuing to improve its position in the market. At the Chicago-based custody, asset servicing and asset management company, which has $704 billion in assets under management and $4.6 trillion in assets under custody, business certainly is growing. And the technology organization that serves the firm's customers and approximately 14,000 employees is keeping pace.
"We have continued to grow through this business and economic cycle," says Scott Murray, EVP and CTO at Northern Trust. "As we have continued to grow as a bank, we are making investments in growing client capabilities. Technology is of strategic importance to servicing our clients."
While many of Murray's peers at other Wall Street firms are struggling to find ways to do more with less, Northern Trust has actually upped its technology expenditure to a little more than $600 million per year, according to Murray, whose responsibilities include overseeing application development, support, technology infrastructure and the architecture innovation functions bankwide. Currently, Murray is responsible for a technology team of around 2,700, which includes a mixture of internal staff and contractors.
But a growing technology budget doesn't automatically equal success, Murray acknowledges. To be sure, it does make things a little easier, but determining where, how and on what to focus is always a challenge at a company as large as Northern Trust. For instance, Murray relates, customers and Northern Trust's employees now routinely expect 24/7 real-time access across many applications, mobile devices are permeating all parts of the business, and data management challenges continue to grow as big data brings more sophisticated anaytics into the financial services space.
When it comes to managing data, Northern Trust started an effort a number of years ago to modernize its own data centers and set up a private cloud infrastructure. "We run our own data centers and believe in doing that as part of our client service capabilities," says Murray, who joined Northern Trust from JPMorgan in July 2011. "We have run our own private cloud for many years. We believe in scalability and capacity for our clients. At this point we are focused on maximizing our private cloud."
One benefit of running its own data centers is that the bank has been able to standardize technology across the organization, resulting in savings, Murray reports. "Early on, we invested in modernizing our data centers and adopting standardized infrastructure," he says, noting that the private cloud and standard infrastructure have allowed the bank to focus more resources on new development and client service rather than on maintenance.
In addition, Northern Trust's private cloud and standardized infrastructure help it provide more data management capabilities to clients, Murray says. "In the asset servicing business, we have been able to combine client data and Northern Trust data to generate performance information that clients can't get anywhere else," he explains, adding that this use of big data technology will likely expand as technology improves.
"We believe that big data -- client data along with our data -- will be turned into actionable intelligence," Murray continues. "The technologies around big data are improving, and the ability to deliver useful information to clients is a competitive advantage. We have invested in big data computing appliances in order to give clients faster access to information." Murray declines to name the big data appliance provider.
Continually improving Northern Trust's ability to deliver information to clients also is seen as a competitive advantage at the firm. "We see the world moving to a real-time basis, rather than overnight processing," Murray says. "For our clients, being agile and having a speed-to-market advantage are important. We have reporting tools that can provide customized data that will get information to our clients faster. That is important."