The Evolution of An Industry

Emerging digital infrastructures, and the rapid digitisation of existing processes are fundamentally changing the asset servicing industry, driven by increasing demand for efficiency and insight. The complete and potentially profound nature of this evolution will require that each step in the industry’s value chain becomes increasingly agile and collaborative.

WHERE ARE THEY NOW? THE MOVE TO DIGITAL MARKETPLACES

Beyond 2030, through digitalisation, we believe fund managers and asset owners will be able to access substantial amounts of structured, intelligent data, and gain actionable insights, at any place, any time, and in any way.^iv

However, they will expect their asset servicing providers to become curators of these disparate data sets, because too much choice, like complexity, is a tax on their time.

Global custodians will be expected to provide highly individualised experiences through the use of AI and sophisticated algorithms. In this brave new digital world, clients will be able to access all their assets across every system, geography, and platform, in a single book of record, at T+0, and all through their digital devices. This will impact every aspect of the value chain.

THE EVOLUTION OF AN INDUSTRY

The value chain of the asset servicing industry is always evolving. An individual buying a stock prior to 1975 would have held a physical share certificate for that stock.

However, after 1975, that actual certificate would have been immobilised in a Central Securities Depository (CSD). From 1985, securities were issued and settled in book entry form, and certificates were phased out entirely.

Over the last decade, digital issuance has begun, and blockchain technology has come to the foreground.

The next evolution will see a rise of new settlement platforms, and the issuance of digital securities. Participants in the chain will evolve further.

By 2030, because of technological advancements, it will be the job of global custodians to act like digital conduits for clients who require local access to markets.ⁱⁱⁱ

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