Regulation is still the main driver of change in sub-custody, but attendees at NeMa Europe in Athens were still surprised by the relatively low number who backed its importance.
In an on-the-spot poll, 39.7 percent said that regulation is driving change, while 18 percent highlighted shrinking margins and 16.2 percent said competitor behaviour.
Buyer behaviour was also considered a driver by 9.3 percent, and 7.4 percent said the rising cost of collateral.
Although regulation was ahead by a significant margin, panellists suggested that it would have been considerably higher had the question been asked this time last year.
One suggested that concern around regulatory change has died down because “it’s becoming part of our DNA”. He said that a large part of a sub-custodians’ objective is understanding what regulations mean for banks and their clients, and a lot of the changes have already been made.
The audience was also asked how they would describe the ideal relationship with a sub-custodian, and more than half, 53.8 percent, answered “a genuine partnership of equals”.
Even so, the consensus on the panel was that, while having a good relationship with a sub-custodian is optimal, clients could still move away from a partnership in pursuit of a better price.
As one panellist put it, “cost is king”, at least, until something goes awry.
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