Finadium: Custodians and Client Facing Technology

The global custody business is becoming digitized, and custodians have adopted innovative strategies in delivering data, widgets and APIs to their global, diverse client bases. A new report from Finadium looks at how custodians are turning their data into client-facing tools and services, and empowering clients to take on tasks that used to be performed by custodians internally.

Custodians have started to do something new in the last several years: after decades of building technology to run at their locations on behalf of clients, they are now delivering their homegrown, acquired or partnered technologies directly to the client’s desktop for the client’s independent control, with the custodian serving as the operational or data processor. Custodians have taken advantage of their existing data warehouses and leveraged their vital safekeeping relationships with their clients to deliver a new sort of offering; their data tools can be used by the same back and middle office staff that interface with the custodian today or can also play an important role in front office investment management. While this move is in lockstep with other major capital markets technology trends, it has also changed a core understanding about the custody business that has consequences for the future of the business.

In this report, Finadium conducted interviews with digital and data managers at Brown Brothers Harriman, BNY Mellon, Citi and State Street to hear their views on how client-facing technology has evolved and where it is heading. The four major custodians profiled each have slightly different views on the business, but commonalities include: a use of data for both client facing and internal purposes; the requirement that data access must be customizable for user needs; and an expectation that data will drive the future of the industry.

The use of data is not simply what clients have traded and hold in their accounts; it includes considering new data points from outside their ecosystems that may be important for clients and integrate that as well. Further, clients are creating their own data internally based on trading, analytics and post-trade activities that require capture and analysis. As the central point of data capture across the organization, asset manager and pension and institutional clients will look to their custodians to consolidate data and deliver back robust tools for analysis.

This report has been written for capital markets professionals with an interest in custody-linked services for large institutions and money managers. It is a competitive analysis of what custodians are doing and a benchmark on their successes versus their peers. It should also be useful for non-custody technology providers and regulators considering what the next opportunities are in the complex and critical custodial-linked marketplace.

Finadium subscribers to our Securities Finance, Collateral and Derivatives reports, and our Fintech Capital Markets reports, can log in here to access this report.

A direct link to the report is

For non-subscribers, more information is available here.

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