Passport to Financial Freedom
Nirup Krishnamurthy, Northern Trust’s chief technology
officer, discusses the trends in financial technology and
how Northern Trust helps clients view and manage their
complete financial picture online.
Q: Many investment techniques seem to
begin with institutional investors and then
migrate into the personal realm. Does the
same hold true with technology?
Yes. At Northern Trust, we see many of
the trends that first take hold in the institutional
realm migrate over to the personal
wealth space. This phenomenon happens
much more frequently and rapidly today
than just a few years ago. For example,
multi-asset strategies used by corporations
for years are becoming a significant demand
among affluent individuals and families. Now
that many personal clients manage their wealth
like institutional investors not private investors,
this makes sense.
Northern Trust’s online account management
systems are evolving to take advantage
of the more advanced reporting techniques
currently available to our institutional clients.
These changes will allow personal clients to
view their investment programs holistically.
For example, just as institutional investors
would want to see a company’s investment
performance delivered in a single report, our
personal clients also want the same holistic view of their assets, regardless of whether they’re held by
Northern Trust or not. These clients also are requiring deeper
and broader reporting capabilities that include views of
accounting and tax information and investment performance.
Q: What are some examples of technology that
Northern Trust developed for its institutional clients
that personal clients now benefit from?
There are many. Personal clients benefit from Northern
Trust’s extensive performance analytics capabilities. Collecting
financial data and then analyzing and reporting performance
are very complex activities that we have significant experience
in managing. In 1977, we were the first custodian bank
to offer a performance analysis product that was capable of
integrating U.S. and non-U.S. assets. The same global performance,
analytics and calculation engine first used for our
institutional clients is now used to deliver our personal client
performance reporting services. We also use a single data
repository that easily facilitates the access and manipulation
of both inbound and outbound transactions and information.
Because we don’t have to segregate the data before we can
do anything with it, we’ve sped up the process and made
it less vulnerable to errors.
Several years ago, Northern Trust introduced online
account aggregation capabilities to our personal clients to
allow them to view assets and liabilities held outside of
Northern Trust alongside their Northern Trust accounts.
This allows our clients to gain a comprehensive view of
their total financial picture.
Q: Besides saving time, what are the advantages to
seeing all accounts in one place?
The convenience factor is certainly an advantage. But, as
I mentioned above, one of Northern Trust’s core strengths
is our performance analytics, and we’ve been at it a long
time. Just as a client wouldn’t want to move from one Web
site to another to cobble together all of his or her investment
information, Northern Trust’s advisors have a distinct
advantage with our single data repository and performance
analytics and calculation engine. Our clients benefit from
the breadth of investment advice they receive because
projections and recommendations are based on a total
view of their portfolios.
Q: What security measures does Northern Trust take
to protect clients who use these online tools?
Northern Trust uses the latest security technology to protect
clients, as well as physical and procedural safeguards that
meet and exceed today’s federal standards. For instance,
Private Passport requires all clients to use 128-bit secure
sockets layer (SSL) compliant browsers. This allows all of the
information transmitted between clients’ computers and our
servers to be encrypted. And we actively — and constantly
— monitor industry security trends and practices to ensure
that we are supporting the highest level of security possible
for our users.
Our servers are equipped with firewall technology that
protects them against unwarranted intrusion and ensures only
approved client requests are processed. All Northern Trust
data centers are located in secured facilities where all activity
is logged and monitored to ensure that no attempts have
been made to breach our security.
Q: Online bill payment is becoming increasingly
popular. What types of procedures do you have in
place to protect clients using this service?
In addition to our many technical security measures,
Northern Trust has a number of operational procedures
in place protecting users of our bill payment service.
When new users sign up for online bill payment services,
for instance, we require an enrollment verification waiting
period. During this time, we are able to contact our clients
by both mail and e-mail in order to verify and, ultimately,
confirm their request.
Additionally, payments made using Northern Trust’s online
bill payment are subject to a $200,000 per payment limit,
and all payments drawn from a client’s account online are
subject to the same review procedures and risk thresholds
as standard paper transactions.
Q: What technology developments are you considering
for personal clients?
We are looking to leverage the enhanced reporting
capabilities available to institutional clients for our personal
clients. These include the ability to weave a client’s internal
and external financial account data throughout the entire
online account management experience. This will not only
give clients the ability to review their accounts held both at
Northern Trust and external financial institutions, but will
allow our clients to proactively monitor and manage all of
their financial matters in one place, and help them make
informed decisions based on their total financial picture.