State Street Corporation, through its subsidiaries, provides a range of financial products and services to institutional investors worldwide. The company offers investment servicing products and services, including custody; product- and participant-level accounting; daily pricing and administration; master trust and master custody; record-keeping; cash management; foreign exchange, brokerage, and other trading services; securities finance; deposit and short-term investment facilities; loans and lease financing; investment manager and alternative investment manager operations outsourcing; and performance, risk, and compliance analytics. It also provides investment management services, such as investment management, investment research, and investment advisory services to corporations, public funds, and other sophisticated investors, as well as offers active and passive asset management strategies across equity, fixed-income, and cash asset classes. The company offers its products and services to mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments, and investment managers. State Street Corporation was founded in 1792 and is headquartered in Boston, Massachusetts.
Business Analysis of State Street
The Financial Services Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how State Street compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by State Street to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of State Street with an interactive chart.
- Revenue Growth: State Street reported a revenue growth of -1.5% year-on-year during 2016. Investment Services Industry grew at -6.5% in the same period
- COGS share of Revenues: State Street COGS share of Revenues details are not available because either company does not share the data or we do not have it
- R&D share of Revenues: State Street R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, State Street spent 50.7% of its total revenues on Sales, Marketing, and General Administration (SG&A). Investment Services industry average SG&A spending in the same period was 54.3%
- Inventory share of Revenues: State Street Inventory share of Revenues details are not available because either company does not share the data or we do not have it
- Accounts Payable share of Revenues: State Street Accounts Payable share of Revenues details are not available because either company does not share the data or we do not have it
- Accounts Receivable share of Revenues: As a percentage of revenue, State Street invested 25.9% of its total revenues on Accounts Receivable (A/R). Investment Services industry average Accounts Receivable investment in the same period was 79.0%
- PP&E share of Revenues: As a percentage of revenue, State Street invested 20.2% of its total revenues on Property, Plants, and Equipments (PP&E). Investment Services industry average PPE investment in the same period was 6.6%
- Intangibles share of Revenues: As a percentage of revenue, State Street invested 74.1% of its total revenues on Intangibles. Investment Services industry average Intangibles investment in the same period was 74.6%
- Net Margins: State Street Net Margins in the year 2016 were 19.3%. Investment Services industry average Net Margins in the same period were 17.8%
Sector and Industry Association of State Street
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.
State Street is associated with Financials Sector Group, Financial Services Sector, and Investment Services Industry.
Financial Services sector is comprised of the following industries: Investment Services; Consumer Finance; Payment and Transaction Processing Services; Financial News, Research and Data. The definitions for each of the industries is as follows:
- Investment Services industry includes investment banking companies, asset management companies, securities brokers and dealers, online brokers, and security/commodity exchanges.
- Consumer Finance industry includes companies providing credit services and mortgage finance services.
- Payment and Transaction Processing Services industry includes companies providing financial news, research, and data services.
- Financial News, Research and Data industry includes companies providing payments and transaction processing services.
Industry Ranking of State Street
With $10.2 billion revenues, State Street ranked number 7 of all the companies in the US Investment Services industry. There were a total of 143 public companies in the US Investment Services industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Investment Services industry by revenues during 2016 were:
- Morgan Stanley ($34.6 billion)
- Goldman Sachs ($30.6 billion)
- Bank Of New York Mellon ($15.2 billion)
- INTL FCStone ($14.8 billion)
- Ameriprise Financial ($11.7 billion)
- BlackRock ($11.2 billion)
- State Street ($10.2 billion)
- Charles Schwab ($7.5 billion)
- Franklin Templeton Investments ($6.6 billion)
- Intercontinental Exchange ($6 billion)
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.