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Line of Business Information
 12 Months Ended
Dec. 31, 2021
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 Digital and CRD, provides services for institutional clients, including mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, investment managers, 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 2018. The Charles River Investment Management system 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, analytics and compliance tools, and advanced data aggregation and integration with other industry platforms and providers. In 2021, we further expanded our technology offering with the acquisition of Mercatus, Inc., enabling the launch of Alpha for Private Markets.
In 2021, we established State Street Digital to focus on the development of digital assets and technologies, including crypto, central bank digital currency, blockchain and tokenization, including the evolution of a new integrated business and digital operating model designed to support our clients' digital investment cycle.
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 ESG 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.
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)202120202019
Other Income$(111)$— $— 
Net repositioning charges(3)133 110 
Net acquisition and restructuring costs
65 50 77 
Legal and related expenses18 (9)172 
Deferred incentive compensation expense acceleration147 — — 
Other expenses35 — — 
Total$151 $174 $359 
The following is a summary of our line of business results for the periods indicated. The "Other" columns represent certain costs incurred that are not allocated to our two lines of business, including repositioning charges, acquisition costs and certain legal accruals. In addition, the acceleration of deferred compensation of $147 million in 2021 was not allocated to our two lines of business. 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 2021.
Years Ended December 31,
Investment
Servicing		Investment
Management		OtherTotal
(Dollars in millions)202120202019202120202019202120202019202120202019
Servicing fees$5,549 $5,167 $5,074 $— $— $— $— $— $— $5,549 $5,167 $5,074 
Management fees— — — 2,053 1,880 1,824 — — — 2,053 1,880 1,824 
Foreign exchange trading services1,149 1,299 974 62 64 84 — — — 1,211 1,363 1,058 
Securities finance402 342 462 14 14 9 — — — 416 356 471 
Software and processing fees(1)
779 706 691 4 27 29 — — — 783 733 720 
Total fee revenue7,879 7,514 7,201 2,133 1,985 1,946 — — — 10,012 9,499 9,147 
Net interest income1,919 2,211 2,590 (14)(11)(24)— — — 1,905 2,200 2,566 
Total other income(1)4 43 — — — 111 — — 110 4 43 
Total revenue9,797 9,729 9,834 2,119 1,974 1,922 111 — — 12,027 11,703 11,756 
Provision for credit losses(33)88 10 — — — — — — (33)88 10 
Total expenses7,182 7,071 7,140 1,445 1,471 1,535 262 174 359 8,889 8,716 9,034 
Income before income tax expense$2,648 $2,570 $2,684 $674 $503 $387 $(151)$(174)$(359)$3,171 $2,899 $2,712 
Pre-tax margin27 %26 %27 %32 %25 %20 %26 %25 %23 %
Average assets (in billions)$296.5 $266.4 $220.3 $3.2 $2.9 $3.0 $299.7 $269.3 $223.3 
(1) Investment Management includes other revenue items that are primarily driven by equity market movements.