State Street | Jobs, Benefits, Business Model, Founding Story

State Street provides various financial, investment management, and advisory services to a global client base of institutional clients, with a view to assisting them in growing and securing their financial resources.

State Street traces its roots back to the rise of the banking industry in Boston, notably the establishment of Union Bank in 1792, which became the third bank to be chartered in Boston and was located at the corner of State and Exchange Streets. In 1865 the Union Bank received a national charter in 1865 and subsequently became known as the National Union Bank of Boston. Not long after, in 1891, State Street Deposit and Trust Company was opened alongside National Union Bank of Boston, and was named the custodian of the first US mutual fund in 1924, the Massachusetts Investors Trust.

In 1925 State Street Deposit and Trust Company merged with the National Union Bank of Boston. This triggered a period of expansion for the Company through a series of mergers and acquisitions, including a merger with Second National Bank in 1955 and with the Rockland-Atlas National Bank in 1961. In 1975 the Company began pursuing a strategy in investments and securities processing, moving away from its traditional commercial banking services, investing heavily in securities management and custodian processing technologies.

Today, State Street provides a broad spectrum of investment management, investment research, and advisory services to a client base that principally comprises institutional clients. The Company has expanded its operations internationally, and has offices across North America, Europe, Asia Pacific, and the Middle East, through which its staff of more than 32,000 work. State Street is ranked 264th on the Fortune 500 list. It trades a portion of its shares on the New York Stock Exchange and has a current market capitalisation of $27.54 billion.

Business model of State Street

Customer Segments

State Street provides a range of financial services and investment management services to an international client base. The Company principally serves institutional clients, including:

  • Commercial and Corporate Clients, comprising a range of businesses and companies across multiple business sectors, notably the insurance sector, including large multinational enterprises;
  • Corporate and Public Retirement Plans, including employee pension and retirement funds; and
  • Financial Institutions and Professionals, including mutual funds, asset managers, collective investment funds, and investment managers.
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State Street operate in more than 100 geographic markets worldwide, including in the US, Canada, Europe, the Middle East, and Asia Pacific. He Company principally, however, serves clients in its native market of the US.

Value Propositions

State Street provides value to its customers in the following ways:

  • Its industry standing and track record, with the Company an established name in the financial services and investment management industry, having a track record for providing reliable services to its clients;
  • Its industry expertise and experience, with the Company employing highly-trained specialist personnel across its two operating segments, with its team led by experienced industry executives;
  • Its varied portfolio of products and services, with the Company offering a range of investment management, investment research, and advisory services to a varied client bases, as well as various ancillary and support services; and
  • Its international and operational reach, with the Company operating across more than 100 markets worldwide, and providing products and services across a number of different asset classes, including equity, fixed-income and cash.


State Street operates a website at, through which it provides information on its various products, services, and activities. The Company also operates a number of regional websites across its various operating jurisdictions. While State Street does not operate an online or mobile sales channel, its State Street Global Advisor subsidiary operates an online platform under the name SPDR, through which it provides various education materials and analytical tools.

State Street employs a team of investment professionals which operate out of the Company’s offices across North America, Europe, and Asia Pacific, including in the UK, the US, Hong Kong, Germany, South Africa, and the Channel Islands. The Company’s various products are distributed to clients both directly through its own personnel, as well as through a network of third-parties and intermediaries, using a variety of investment vehicles including exchange-traded funds and through State Street Global Advisors’s SPDR-branded exchange-traded funds.

Customer Relationships

While State Street provides a range of information to clients online through its regional websites. It also offers an online platform through which customers are able to access educational resources, analytics tools, and investment information on a self-service basis, without interacting directly with members of the Company’s staff.

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State Street’s investment professionals work closely with customers, providing ongoing advice and support. The Company consults with its clients over a period of time so that it is able to identify the most appropriate products and investments for each client’s individual circumstances. State Street seeks to establish longstanding relationships with its customers.

State Street provides various online resources to its customers, including a number of market insight papers and investment management articles. The Company also operates social media accounts, including with Twitter and LinkedIn, through which it can interact directly with existing and prospective clients.

Key Activities

State Street operates as a financial holding company, which provides a range of financial and managerial support services to its operating subsidiaries.

State Street’s activities are organised into two business segments: Investment Servicing, which performs core custody and related value-added functions, such as clearing, payment and settlement services; and Investment Management, which, through subsidiary company State Street Global Advisors, provides a range of investment management, investment research and investment advisory services.

State Street’s clients include mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments and investment managers.

Key Partners

State Street collaborates with various companies and institutions in the provision of its products and services. These partnerships include:

  • Academic and Research Partners, comprising a range academic institutions and research companies with which the Company jointly researches and develops new financial and investment solutions;
  • Supplier and Vendor Partners, comprising suppliers of tools, technologies, and services, including investment servicing, investment research, and trading service providers;
  • Joint Venture Partners, comprising a range of companies, principally financial services providers, with which the Company collaborates on joint projects through mutually owned entities; and
  • Strategic and Alliance Partners, comprising various companies and organisations with which the Company shares resources and collaborates on joint projects.

State Street has research partnerships with The Boston University Centre for Finance, Law, and Policy, and The Fletcher School/Tufts University. Its service partners include Boston Financial Data Services, International Financial Data Services, International Fund Services, and The WM Company.

Key Resources

State Street’s key resources are its financial resources and investors, its intellectual properties, its communications and IT infrastructure – including its State Street Global Advisors online platform, its sales and distribution channels, its physical infrastructure of offices its partnerships, and its personnel.

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State Street depends on the quality and efficiency of its IT and communications infrastructure in order to complete and implement transactions quickly and reliably. The Company also maintains a physical network of offices around the world so that it is able to serve clients locally, this includes offices across North America, Europe, Asia Pacific, and the Middle East.

Searches of records published by the US Patent and Trademark Office identified two applications filed in the name of State Street and its subsidiary State Street Global Markets, entitled “Systems and methods for facilitating electronic securities transactions” and “Systems and methods for private cloud computing”.

Cost Structure

State Street incurs costs in relation to the maintenance and development of its IT and communications infrastructure, the development of its online platform, the payment of various professional fees, the management of its partnerships, the operation of its sales and distribution channels, and the retention of its personnel.

In 2015 State Street accrued total annual expenses in the amount of $8.05 billion. A little more than half of these expenses came in the form of compensation and employee benefits paid to its workforce of 32,356 employees. The Company also accrued substantial costs in relation to the maintenance of its information systems and communications, which amounted to $1.02 billion in 2015. The Company’s transaction and processing expenses totalled $793 million, while its occupancy costs amounted to $444 million.

Revenue Streams

State Street generates revenue through the provision of various investment management, investment research and advisory services to its global client base of institutional clients. This includes revenue derived from foreign exchange activities, from the collection of various fees, and from the completion of its various transactions.

In 2015 State Street generated a total annual revenue of $10.36 billion, up marginally on the $10.27 billion recorded by the Company in 2014. Around half of the Company’s revenue was generated through the Company’s collection of servicing fees, which totalled $5.15 billion for the year. Much of the Company’s remaining revenue was derived from the collection of management fees, which amounted to $1.17 billion, with total trading services revenue totalling $1.15 billion.


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