Custody
Asset safety with global market access and operational expertise.
Key Takeaways
- Custody is evolving from asset safekeeping into a strategic, connected service that helps clients manage complexity, improve capital efficiency and make faster, better-informed decisions.
- As investors expand into emerging markets, private markets and digital assets, interoperable infrastructure, consistent controls and strong operational readiness are becoming essential to avoid friction, cost and risk.
- Better-connected custody data across assets, cash, collateral and servicing can reduce prefunding, idle cash and settlement failures while unlocking greater liquidity, funding efficiency and revenue opportunities.
- AI and operational intelligence are key differentiators, using connected data and human oversight to proactively identify risks, resolve exceptions faster and enhance client service at scale.
Foreword
The Evolving Role of Custody
Custody has always provided the operational foundation on which investors depend. As portfolios become more global and time-sensitive, and investable asset classes continue to broaden across traditional, digital, private and others, that foundation is becoming more consequential. Each new market or asset class introduces dependencies across accounts, currencies, funding, settlement, servicing and data.
Where those elements remain fragmented, value can be eroded through excess prefunding, idle cash, higher foreign-exchange and funding costs, delayed tax recovery, underutilized collateral and missed investment opportunities. Access to growth therefore depends on operational readiness as much as investment strategy.
Custody is no longer all about safekeeping assets. It’s about providing simpler ways to operate across increasingly complex portfolios and markets and creating better intelligence to inform faster, smarter decisions – so clients get more from every asset.
The custodian is increasingly the connective layer across these dependencies. By combining asset safety, scale, resilience and balance-sheet resources with connected data, interoperable infrastructure and operational intelligence, custodians can help investors extend consistent controls across an expanding range of investable assets, improve the use of capital and make better-informed decisions across the investment lifecycle.
Traditional custody measures, including asset safety, processing accuracy, service levels and transaction costs, remain essential. However, today’s definition of custody must also be based on the speed of market entry, the level and duration of prefunding, the performance of collateral and securities-lending utilization, settlement-failure mitigation and the timeliness and intelligence of portfolio data.
Drawing on interviews with leading market specialists and The ValueExchange data, we wanted to examine three ways in which the role of custody is evolving:
- Operational excellence within an expanding investment universe: Extending rigorous standards of asset safety, processing and oversight and the increasing importance of interoperability across traditional, emerging-market, private-market and digital assets.
- Turning portfolio visibility into financial value: Connecting data across assets, cash, collateral and obligations to reduce costs, improve mobility and make more capital available for investment.
- Turning data into operational intelligence: Using connected data, specialist insight and AI to identify risks, inefficiencies and opportunities proactively.
In short, custody is now a holistic solution across the investment lifecycle, with clear value for investment performance.
-Emily Schlosser, Head of Global Custody Business
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The Custody Edge: Connecting Markets, Assets & Intelligence
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The Custody Edge: Connecting Markets, Assets & Intelligence
Download the full report
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