The industry is seeing greater collaboration, with fintechs choosing to work with existing providers rather than starting up new platforms, according to panellists at the Global Custody Forum in London.
The panel explained it’s important that the asset servicer picks the right fintech to work with because as one panellist suggested the product set and client service needs to be “spot on” while another described it as a “fine balance”.
It was also noted that the big difference between technology companies and banks is regulation. One panellist suggested that the asset servicer could be the target of the regulator and be responsible if the firm they are collaborating with causes a problem.
A speaker said: “It’s a huge hurdle for a technology coming into a bank because of that regulation as it changes the way you think.”
The panel explained that the industry is currently seeing a lot of pressure, especially around pricing. As part of the greater collaboration the industry is seeing, banks are now working with an outside provider who is delivering to the client rather than it being built internally.
One panellist said: “As a global custodian you own the platform but what you’re trying to do is create an open platform, allowing people to plug in.”
The panellist added: “At the same time you’re not trying to do everything yourself, not one company can do everything great. For example, Facebook couldn’t create an equivalent Whatsapp, they had to buy it.”
“Banks will get to stage where they either have to acquire technology companies or collaborate with them in some way. It’s good the industry can be adaptable to enable the client to get the services they want.”
The panel concluded explained that even for the smaller and more niche players in the market, technology is now more affordable. One speaker explained that because of this there is now a more level playing field across the industry.
