05 December 2017
Reporter: Becky Butcher

GCF: Custodians should anticipate a shake-up

Asset servicing professionals have mixed views on whether the market will see new global custody players appearing over the coming years, it emerged at Global Custody Forum in London.

A panel at the event discussed the new custody landscape, and the ways in which worldwide custody is changing.

Rohinton Mewawala, COO of StockHolding, said that the top 10 global custodians will remain as they are in the near future, however he suggested that nevertheless, “there will be change”.

Mewawala explained that institutions will start to do more around customer service, using application programme interfaces. This way, the customer will be able to read data, pick up what they want from there, using that data and producing analytics in the way they want to.

He commented: “I think there will be change, but I still don’t think the top are going to lose their space, because I think in the forthcoming market, even if they do not change for the next five years, it is not going to be all chartered, but custodians are going to be inefficient.”

He stressed that custodians “need to do something”.

However, Mewawala explained that if custodians work on this today, 10 years from now, the same top 10 will stand, but they will be making a good profit.

Ulf Noren, global head of custody sales at SEB, had a different outlook, suggesting that people making these predictions “might regret them”.

Noren said: “This will be a long journey, but I think we will see a slow consolidation sweeping over a number of central securities depositories.”

He also noted that this could be the case on the sub-custodian side.

Technology will also play an “important part” in this process, according to Noren.

He said technology will change the industry we work in, “providing we find a way to overcome the biggest threat we will ever face, and that is cyber crime”.

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