The custodian space has evolved over the past 30-years. Operations
were once manual, with back-office functions designed to input volumes of data.
With the help of information technology, the industry was able to remove manual
components of the business, which became necessary for mitigating risk and
reducing errors. Automation then revolutionised how large volumes of data were
handled, eliminating the need for employees to work in repetitive low-level
tasks and allowing for a reallocation of resources to focus on client services.
The internet revolution provided a more seamless mode of transferring
information between custodians and their clients, and the capacity of the
custodian to provide added real-time services. Now, digitalisation has become
the major catalyst for the continuous change in the way the business interacts
On the cusp of this digital transformation for custodian banks and their clients, BNP Paribas Securities Services has commissioned the research team of TABB Group, a capital markets consulting firm, to acquire a deeper understanding of the expectations of sell-side executives at mid-sized US banks and broker-dealers on the future of custody: how they believe the digital revolution will change the business as well as focusing on their concerns, expectations and needs.
Digitalisation has become the major catalyst for the continuous change in the way the business interacts with clients
Specific technology requests for their custodians included cloud computing and storage to migrate their own applications, digital identifiers to mitigate security risks, and distributed ledger technology.