Teresa Heitsenrether at the New York Stock Exchange Courtesy of JPMorgan

J.P. Morgan Chase is letting clients tap crucial software used by its own trading desks for the first time. At the heart of the world's biggest investment bank is an all-seeing program that allows its traders and salespeople to value trillions of dollars in stocks, bonds and currencies. Now, J.P. Morgan is letting clients access the trading program — named Athena after the Greek goddess of wisdom – to run analytics on their own investments, according to Teresa Heitsenrether, the bank's global head of custody and fund services. Her business safeguards almost $25 trillion in assets and is known for winning the industry's biggest-ever deal last year by convincing BlackRock to move $1.3 trillion in assets. The firm has already sold subscriptions to its Investment Analytics Platform to 208 big investors, Heitsenrether said in an interview. Another 42 clients are expected to sign by year-end. Banks want to move from hawking individual products to becoming platforms that clients can turn to as one-stop shops for financial services. The shift is necessitated – and enabled by – advances in technology that allow software to replace human-heavy processes. As the world of finance becomes digitized, simple activities like custody become cheaper to provide, and so banks have to offer harder-to-replicate services as part of a bundle to inspire loyalty. "The value of the traditional business of purely operational services continues to diminish because we're finding better ways to do things with technology," Heitsenrether said. "The battle will be won and lost on, 'Can you give me the right information, analytics and services on top of that?' Becoming a platform is where we see the future." It's also the latest example of a big financial firm finding commercial applications for software it originally created for its own needs. BlackRock, the world's largest money manager, created a risk analytics program known as Aladdin almost three decades ago. Now Aladdin, sometimes referred to as an X-ray machine for portfolios, helps manage $18 trillion of the planet's financial assets, mostly through licenses to institutional investors.

More products to follow?

More recently, Goldman Sachs has opened up its risk management system called SecDB to clients in a range of apps to help clients customize derivatives or other instruments. J.P. Morgan's effort, which went live earlier this year, is the bank's first external product based on Athena. Others may follow: It's looking to offer related services in the future, including risk management systems for regional and foreign banks. Athena was created with help from some of the same engineers who designed Goldman Sachs' SecDB in the 1990s. Goldman's program was seen as the bank's secret sauce for trading because it allows for a unified, real-time view of risk across a bank's trading positions. SecDB is credited with helping Goldman navigate the 2008 financial crisis better than other banks, which typically relied on a network of cobbled-together programs across trading desks. At J.P. Morgan, Athena replaced nine separate systems in the fixed income division and later spread to include equities. Clients targeted for J.P. Morgan's IAP include pensions, endowments and insurance companies. Those asset owners are assuming more investing duties to save money, said Heitsenrether, a 30-year J.P. Morgan veteran who took over the custody bank in 2015. While big asset managers already have sophisticated tools to examine their holdings, pensions and others don't, providing an opening for J.P. Morgan, she said. "They don't have a good way to aggregate all that info across multiple external portfolio managers, and may discover that they have an overly concentrated position in Apple because everyone owns the same stuff," Heitsenrether said. The move puts J.P. Morgan at odds with products from industry vendors including MSCI and Bloomberg, she said. The bank declined to provide revenue projections for the program; it's seen more as a way to attract and retain clients to the custody business than as a stand-alone operation, according to a person with knowledge of the firm. Custody helped generated $3.9 billion in revenue last year, a 9 percent increase from 2016. So far this year, revenue in the business has climbed 11 percent.

Custody is a growth business