Since our listing on the Australian Securities Exchange (ASX) in 2015, we have been focused on transforming our business as a global organisation.
The acquisition of LAS in FY2018 has underpinned our expansion in Europe and the UK, enabling us to expand our offerings in existing markets and to enter new markets that are in line with our strategic direction.
This past year, we continued to focus on building our core competencies in scaled financial administration and managing regulatory change, as well as investing in technology, innovation and our people.
In June 2019, we announced created a new operating model and organisation structure to reflect a more integrated business, comprising global business divisions and global functions, with a regional coordination overlay. These business divisions are as follows:
Link Group provides a comprehensive corporate market offering across global equity markets. Our services connect issuers with their stakeholders, and include shareholder management and analytics, stakeholder engagement, share and unit registry, employee share plans and company secretarial services.
Retirement & Superannuation Solutions
Link Group is the largest provider of services in Australia’s superannuation fund administration industry, which services the fourth largest pension pool in the world based on funds under management.
We are a leading independent Authorised Fund Manager and provider of fund administration and transfer agency services. With a focus on strong governance, regulatory expertise and risk management, our business helps to alleviate compliance complexities for asset managers and investors.
Banking & Credit Management
Our leading pan-European loan servicing platform offers end-to-end servicing and asset management for clients across residential and commercial asset classes, working for both banks and other credit origination platforms as well as financial investors.
Technology & Operations
Our Technology & Operations division brings together our proprietary technology platforms, operations and value‑added services of data analytics and digital solutions to support our clients’ varied and ever-changing needs. We harness new and emerging technologies and a culture of continuous improvements to deliver scaled, operational efficiencies that are underpinned by robust data and information security.
Our goal of becoming a global organisation will enable us to deliver improved outcomes for both our clients and their customers through:
- regional hubs that provide more consistent, high‑quality support to clients – no matter where they are located;
- deeper insights from data across all business lines that enables us to deliver more value for our clients;
- combining our skills and experience across the group to deliver value added services that can be leveraged in multiple lines of business, including the development of Centres of Excellence;
- enhanced service delivery through improved service coverage across time zones and geographies; and
- high data security and privacy standards that are supported by globally integrated systems and data networks.
Our five strategic pillars guide our priorities and activities. Overall, while there is still work to do, we ended the year having achieved several key foundational steps and believe that we are positioned well to deliver on our medium to long term strategic growth plans.
Pillar 1: Growing with our clients in attractive markets
At the core of this pillar is delivering exceptional client service to support our clients’ growth in their markets.
In FY2019, many of our clients were presented with challenging operating environments. For example, in Australia the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (‘Royal Commission’), legislative changes and overall heightened regulatory oversight resulted in much of our clients’ focus being on addressing these challenges. In Europe, we worked closely with our clients to develop a range of operating scenarios in light of prolonged uncertainty regarding Brexit. In both situations, we continue to support and help our clients execute their strategies in response to these challenges.
With the benefit of our scale and expertise, our ability to help our clients manage growing regulatory complexity – which is a long term characteristic of the global operating environment and various markets – is a key competency of ours. Our ability to help our clients with administration and value-added solutions that adhere to regulatory requirements can present multiple opportunities in terms of new products and services as we support our clients in addressing these requirements.
This year saw us secure a number of contract wins including 130 net new clients in Corporate Markets, including China Tower in Hong Kong and Coles Group in Australia. We also renewed clients in Australia such as Commonwealth Bank of Australia and Suncorp. In the UK, our Corporate Markets business renewed clients such as Standard Life Aberdeen and Whitbread, while Link Fund Solutions renewed contracts with Prudential and Troy Asset Management.
In our superannuation administration business, of key significance was the renewal of our long-running contract with Australia’s largest superannuation (pension) fund, AustralianSuper, as well as renewals from funds such as GESB, Local Government Super and ACIRT. Subsequent to the FY2019 reporting date, in August 2019 we also announced that we had entered into a new administration contract with Retail Employees Superannuation Pty Limited (Rest).
Pillar 2: Product and service innovation
With leading market positions in many of the industries and markets in which we operate, we have both the capacity and ability to dedicate resources towards enhancing our product suite and support for clients and their own customers and stakeholders.
Technology innovation — particularly digitisation — has always been a structural driver in our markets, especially given the changing expectations of people and how we connect them with and safeguard their assets. Our plans for meeting these expectations, and exceeding them where possible, are key to our long term growth strategy.
During FY2019, we rolled out multiple initiatives designed to support self-service access and a digitisation of a number of processes across our business, including:
- new mobile apps such as the award-winning Link Investor Centre app1 for retail shareholders;
- a consolidated data analytics hub that takes data from multiple sources to provide more tailored, actionable insights for a more personalised end-user experience;
- artificial intelligence (AI) and machine learning technologies that help us enhance the customer experience; and
- a Fund Management Centre that provides investors with 24/7 access to real-time information about their managed fund investments.
Another significant investment was commencing the implementation of global Centres of Excellence and specialist hubs that will leverage our global knowledge and experience in key areas such as information security. This will benefit our clients as we standardise and better leverage our expertise across all markets, while also helping us to streamline how we manage and operate these technologies.
As part of our structural re-alignment to reflect a global growth strategy, our Technology & Operations teams will now operate as a global team. This will accelerate client‑focused technology innovation across our organisation and support continuous improvement in our operational processes.
1 Voted “Financial Services App of the Year” in Financial Standard’s MAX Awards 2019
Pillar 3: Integration and efficiency benefits
Over the past 15 years, Link Group has a proven track record of delivering the benefits of integration and scale to our clients. Integration is very important in reducing operational risk and enabling our operating environment to remain efficient and scalable.
Alongside the integration and transformation of LAS, we also substantially benefited from the synergies of the Superpartners acquisition. This has been a five-year program that has delivered significant efficiency benefits across many areas of our business.
Some examples of integration and efficiency benefits include the following:
GROUP FUNCTIONS INTEGRATION: We now operate from common global systems in the areas of Finance, Human Resources, Risk and Compliance, which will improve systems management and create more consistent, efficient ways of working.
PREMISES CONSOLIDATION: Premises consolidation and relocation in the UK began in FY2019, with the aim of providing high-quality working environments with lower environmental footprints as well as ongoing cost-rationalisation. This saw us starting to combine offices in the UK to form a key operating hub in Leeds which will be operational in FY2020. We have also begun planning for an expanded service hub in Mumbai to further support our operations strategy.
VENDOR CONSOLIDATION: We commenced a whole-of-business approach to vendor sourcing and management in areas such as IT, facilities management, treasury and professional services. A key highlight is the signing of a global contract with Microsoft that will support a group-wide move to cloud computing and enable us to leverage their expertise in technologies such as AI to assist us in rolling out innovation at scale.
Pillar 4: Client, product and regional expansions
At the end of FY2019 Link Group had operations in 14 jurisdictions, presenting us with opportunities to scale by expanding our product suite into existing markets where we can leverage existing local knowledge, relationships and expertise.
An example of this strategy in action was the launch of our share registry business in Hong Kong. Another was commencing the expansion of our well-established Australian retirement and superannuation administration competencies into the UK market, where regulatory change is driving significant growth in the pension sector and Link Group’s capabilities provide a competitive difference.
We also made acquisitions in existing markets such as the Netherlands, where we expanded our presence for Banking & Credit Management with the acquisition of FlexFront and NHL in early 2019.
A key element in our expansion into new products and regions is continued talent identification and investment in our people. We are continuously developing an international workforce who understand both our global aspirations as well as their local market, so that we are able to implement our long term strategic plans for growth by ensuring we have the required local customisation to our products and solutions.
Hong Kong share registry
In August 2019, we established a new share registry offering in Hong Kong, under Link Market Services.
Greenfield businesses of any kind can be challenging to establish, however we were able to build on our existing, 10-year presence in Hong Kong through our Orient Capital business, which services more than 350 listed entities in the region.
With these clients having a common profile as those we are targeting for share registry in Hong Kong, we were able to leverage our existing relationships to offer a service that now combines our Link Market Services share registry offering with that of our Orient Capital investor relations services, resulting in a more holistic service, all delivered via our “miraqle” platform.
Pillar 5: Identifying adjacent market opportunities
Our core markets are subject to many structural drivers, from economic conditions and regulatory change, to evolving customer sentiment. Continuing to strengthen Link Group’s sustainability is important for our clients, employees and shareholders. Our growth strategy is therefore designed to take advantage of appropriate, adjacent market opportunities while aiming to minimise overall risk.
We continually review and assess our businesses from the point of view of our overall strategic goals, and actively seek out market opportunities in the form of potential investments and acquisitions in adjacent and new markets. For example, increasing our investment in PEXA and our investment in Leveris were part of this strategic pillar, with these investments providing future platforms for growth.
We also review existing businesses for ongoing strategic fit. The divestment of CPCS in 2019 was an outcome of this process and allowed us to realise capital, strengthen our balance sheet flexibility and will facilitate future investment in earnings accretive opportunities.
Looking ahead to FY2020 and beyond
While we anticipate that in FY2020, structural market drivers such as technology, outsourcing, regulatory change and capital market activity will continue to impact our clients and our businesses, along with one‑off geo‑political issues such as Brexit, in many cases these also present potential growth and revenue opportunities for Link Group over the medium to long term. We are committed to working closely with our clients to help them best address these drivers and the impact they bring, and believe that our scaled, effective and efficient solutions will also continue to assist.
For this reason, we remain confident that our core competencies of managing regulatory change and providing efficient, scaled financial services administration position us well for the future. Our focus remains on continuously improving our offerings in these areas especially through the use of technology and innovation, to be able to offer a wider range of services to a broader range of clients.