SWOT Analysis: State Street Bank

SWOT Analysis: State Street Bank

State Street Bank, founded in 1792, is a United States-based financial services holding company headquartered in the Financial District of Boston, Massachusetts. Traded as STT on the New York Stock Exchange, State Street Bank has seen significant criticisms in recent years, stemming from pending lawsuits against the bank by many of its national branches, many of whom have cited alleged fraud on currency trades and issues with mishandled pensions. However, State Street continuously ranks amongst the "World's Best Banks," as ranked by Global Finance, specifically in the area of asset management (Global Finance, 2009, p. 18). Providing a full-range of services and products for large pools of investment assets, State Street Bank holds $22.8 trillion in assets under custody and $2.1 trillion in assets under management as of 2011, their primary clients are institutional investors (SEC, 2011, p.1) With considerable resources, a world-renowned name and public image, powerful clientele, and consistent innovation and expansion, State Street Bank has carved a niche for itself in the upper-echelons of industry leaders.

SWOT Analysis

State Street's strengths are what have undoubtedly allowed the company to rise to position of power that it has within the global financial market as well as in the American economic landscape. The company's strengths, then, are many, and have afforded the company its rise to success as well as its current standing as one of the largest service providers to institutional investors on a global scale, holding a "relatively strong Tier 1 capital position," which has allowed the company to maintain its stability (DATAMONITOR, 2011, p. 5). Additionally, State Street has expanded significantly since its inception as a company, allowing revenue to stream in from all over the world from many different geographical sources. Unlike many competitors, State Street's existence within the world market has consistently provided employees and investors with long-standing methods for success that have proven effective in an array of diversified manners. State Street does not cater to a certain investor, but rather to all investors. From established businesses to individuals to nonprofit organizations, State Street has long upheld a single standard of customer relations, which has allowed this customer pool to expand and diversify.

Where State Street has its many strengths, so too does it have its weaknesses. As mentioned previously, the company has faced significant public scrutiny for its non-compliance in trade and regulatory measures which has placed the company's reputation in harm's way. In the current American economic landscape, with a country and its citizens still reeling from company misinformation and mistrust, continuing scandals from the investment world do nothing but add to this still-lingering problem. Not only do situations like this hurt a company's reputation, but increased and extensive legal costs place consistent financial burdens on the company and its international branches, which cannot afford to find themselves in any more scandal.

State Street has long made it a company mission to not only serve the needs of its institutional investors, but to continue providing that service in a way that is both effective and innovative. It is this innovation that can be viewed as State Street's most viable opportunity for future endeavors and investor relations. With the passage of time comes complete IT transformation, which State Street has not only embraced, but added into its business model. Business operations within State Street branches are continually modified to adjust to advances in IT, which allows for the company to remain ahead of the game in terms of competition as well as providing the most effective service to its clients.

The business that State Street does has the capacity to be dramatically changed by new regulations and reforms set forth by the government, which is something that remains one of the company's most visible threats in the foreseeable future. For instance, President Obama's 2010 signing of the Dodd-Frank Wall Street Reform and Consumer Protection Act into law continues to impose restrictions and limitations on how State Street Bank and its counterparts operate (DATAMONITOR, 2011, p.8). While such regulations have the capacity to adversely affect business performance, company compliance with new standards may prove to be beneficial in the long-run, with consumers and investors cognizant of State Street's compliance with standards.