Pursuing innovation in financial services
Australian export case study
Having built a presence in all of the world’s major financial markets, Computershare plans to remain the global leader in helping public companies to maintain strong relationships with investors.
Over the past five years, Australia’s Computershare has become the world’s largest provider of investor services, servicing more than 100 million shareholder accounts.
With operations and 12,000 employees in more than 20 countries, Computershare is the prominent force in share registration, employee equity plans, proxy solicitation, dividend payments, and other specialised financial, governance and stakeholder support.
Since 1978, the Melbourne-based company has grown to become a A$4.5 billion business by continuing to invest in its proprietary technology and product development. Revenue in 2011 was about US$1.6 billion, more than 75 per cent of which came from outside Australia.
An innovative service offering
The CEO of Computershare, Stuart Crosby, says the company maintains its global advantage by investing in innovation. Heavily committed to technology, the company spends over A$100 million annually on IT services.
“Where our competitors have tended to be change resistors, we have always been interested in and motivated by providing new services,” says Crosby. “We were first to have online services, first with online transactions, and now first with a mobile AGM voting application.
“For large companies with operations in multiple capital markets we can provide an integrated solution that is unique. For every BHP Billiton or HSBC that needs to do global transactions, we have something they just cannot get from anyone else.”
Today, investor services is a specialist industry. Once the domain of large financial institutions, its inherent regulatory risk, technology investment demands, and labour requirements convinced the big players to leave the business.
In this environment Computershare has used its technological expertise to offer investor services more efficiently and cheaply than anyone else.
“Because we came from a technology background we were always pushing for more efficient ways to do things, not just for us but for the industry and our clients,” says Crosby. “This gave us significant advantages in attracting and keeping clients.
“As we grew around the world our people have moved from the UK, South Africa, Hong Kong and the US developing a unique skill set in taking technology into new markets and fitting it to whatever that market required.”
Finding opportunities in Europe
Europe has always been a difficult proposal for Computershare. The company is much smaller there because historically, its systems and products have revolved around capital markets that are based on English company law.
Austrade has been some help here, assisting with networking Computershare into the European business community, helping the company to raise its profile, and supporting its efforts to explore new expansion opportunities.
Crosby says there are many subtleties for success as an Australian company in Europe, the first of which is coming to terms with the nature of the geographic and economic zone itself.
“In our business there is no such thing as Europe,” he says.
“There is Germany, France, Spain, Italy, Scandinavia, and so on – it is not homogenous. The market infrastructure is dramatically different among the major European economies – and not just how the computer systems work, but also how the law works, and how the markets operate. Understanding this granularity is vital.”
It is also important, says Crosby, to appreciate that people are now looking to build more pan-European infrastructure.
“One of the advantages Australians have here is neutrality,” says Crosby. “This distinguishes us from others. We are able to deal with a wider range of people without having to negotiate any cultural or historical baggage.”
The way forward: staying in touch
In most markets, Computershare works as an agent of public companies who issue securities. In Europe, the banks act as agents. This can generate confusion for investors and public companies.
“Companies struggle to understand exactly who their investors are, and investors don’t have clear ways to communicate with companies,” says Crosby.
“However, there is a lot of regulatory reform in the pipeline which will change this landscape. For us, this means getting ready for a bigger role in the vacuum that will be created when those changes eventuate.”
To prepare, Crosby says Computershare is involved with all the influential parties, such as the European Parliament and Europe’s central banks. The company maintains frequent contact with large infrastructure providers, the securities exchanges, and the major European banks.
“It’s all about being plugged in, understanding what’s going on, and working with people to unearth the potential opportunities,” says Crosby.
“We can’t just turn up with a blueprint from Melbourne or New York and say here is what you need in Europe. That will not work. It’s an iterative process of constant engagement with the many different interest groups who are shaping the future.
“The unhealthy amount of turmoil has made things more difficult and we have battled to find a way to be relevant in Europe.
“But we want to grow our business there and we need to be ready for those opportunities when stable times return.”
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