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Line of Business Information
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Line of Business Information Line of Business Information
Our operations are organized into two lines of business: Investment Servicing and Investment Management, which are defined based on products and services provided. The results of operations for these lines of business are not necessarily comparable with those of other companies, including companies in the financial services industry.
Investment Servicing, through State Street Institutional Services, State Street Global Markets, State Street Global Exchange and CRD, provides services for U.S. mutual funds, collective investment
funds and other investment pools, corporate and public retirement plans, insurance companies, foundations and endowments worldwide. Products include: custody; product accounting; daily pricing and administration; master trust and master custody; depotbank services (a fund oversight role created by non-U.S. regulation); record-keeping; cash management; foreign exchange, brokerage and other trading services; securities finance and enhanced custody products; deposit and short-term investment facilities; loans and lease financing; investment manager and alternative investment manager operations outsourcing; performance, risk and compliance analytics; and financial data management to support institutional investors.
Included within our Investment Servicing line of business is CRD, which we acquired in October 2018. The Charles River Investment Management solution is a technology offering which is designed to automate and simplify the institutional investment process across asset classes, from portfolio management and risk analytics through trading and post-trade settlement, with integrated compliance and managed data throughout. With the acquisition of CRD, we took the first step in building our front-to-back platform, State Street Alpha. Today our State Street Alpha platform combines portfolio management, trading and execution, advanced data aggregation, analytics and compliance tools, and integration with other industry platforms and providers.
Investment Management, through State Street Global Advisors, provides a broad range of investment management strategies and products for our clients. Our investment management strategies and products span the risk/reward spectrum for equity, fixed income and cash assets, including core and enhanced indexing, multi-asset strategies, active quantitative and fundamental active capabilities and alternative investment strategies. Our AUM is currently primarily weighted to indexed strategies. In addition, we provide a breadth of services and solutions, including environmental, social and governance investing, defined benefit and defined contribution and Global Fiduciary Solutions (formerly Outsourced Chief Investment Officer). State Street Global Advisors is also a provider of ETFs, including the SPDR® ETF brand. While management fees are primarily determined by the values of AUM and the investment strategies employed, management fees reflect other factors as well, including the benchmarks specified in the respective management agreements related to performance fees.
Our investment servicing strategy is to focus on total client relationships and the full integration of our products and services across our client base through cross-selling opportunities. In general, our clients will use a combination of services, depending on their needs, rather than one product or service. For instance, a custody client may purchase securities finance and cash management services from different business units. Products and services that we provide to our clients are parts of an integrated offering to these clients. We price our products and services on the basis of overall client relationships and other factors; as a result, revenue may not necessarily reflect the stand-alone market price of these products and services within the business lines in the same way it would for separate business entities.
Our servicing and management fee revenue from the Investment Servicing and Investment Management business lines, including foreign exchange trading services and securities finance activities, represents approximately 70% to 80% of our consolidated total revenue. The remaining 20% to 30% is composed of software and processing fees, including CRD, as well as NII, which is largely generated by our investment of client deposits, short-term borrowings and long-term debt in a variety of assets, and net gains (losses) related to investment securities. These other revenue types are generally fully allocated to, or reside in, Investment Servicing and Investment Management.
Revenue and expenses are directly charged or allocated to our lines of business through management information systems. Assets and liabilities are allocated according to policies that support management’s strategic and tactical goals. Capital is allocated based on the relative risks and capital requirements inherent in each business line, along with management judgment. Capital allocations may not be representative of the capital that might be required if these lines of business were separate business entities.
The following is a summary of our line of business results "Other" column for the periods indicated.
Years Ended December 31,
Other
(Dollars in millions)202020192018
Net repositioning charges$133 $110 $300 
Net acquisition and restructuring costs
50 77 24 
Accrual release(9)— — 
Legal and related expenses— 172 50 
Business exit costs— — 24 
Total$174 $359 $398 
The following is a summary of our line of business results for the periods indicated. The amounts in the “Other” columns were not allocated to our business lines. Prior reported results reflect reclassifications, for comparative purposes, related to management changes in methodologies associated with allocations of revenue and expenses to lines of business in 2020.
Years Ended December 31,
Investment
Servicing		Investment
Management		OtherTotal
(Dollars in millions)202020192018202020192018202020192018202020192018
Servicing fees$5,167 $5,074 $5,429 $— $— $— $— $— $(8)$5,167 $5,074 $5,421 
Management fees— — — 1,880 1,824 1,899 — — — 1,880 1,824 1,899 
Foreign exchange trading services1,299 974 1,071 64 84 82 — — — 1,363 1,058 1,153 
Securities finance342 462 543 14 9 — — — — 356 471 543 
Software and processing fees(1)(2)
706 691 443 27 29 (5)— — — 733 720 438 
Total fee revenue(1)
7,514 7,201 7,486 1,985 1,946 1,976 — — (8)9,499 9,147 9,454 
Net interest income2,211 2,590 2,691 (11)(24)(20)— — — 2,200 2,566 2,671 
Total other income4 43 6 — — — — — — 4 43 6 
Total revenue(1)
9,729 9,834 10,183 1,974 1,922 1,956 — — (8)11,703 11,756 12,131 
Provision for credit losses88 10 15 — — — — — — 88 10 15 
Total expenses(1)
7,071 7,140 7,081 1,471 1,535 1,544 174 359 390 8,716 9,034 9,015 
Income before income tax expense$2,570 $2,684 $3,087 $503 $387 $412 $(174)$(359)$(398)$2,899 $2,712 $3,101 
Pre-tax margin26 %27 %30 %25 %20 %21 %25 %23 %26 %
Average assets (in billions)$266.4 $220.3 $220.2 $2.9 $3.0 $3.2 $269.3 $223.3 $223.4 
(1) Investment Servicing includes results from our acquisition of CRD on October 1, 2018.
(2) Investment Management includes other revenue items that are primarily driven by equity market movements.