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to their providers to come up with opportunities to leverage
those technologies for this model,” says Chapman.
Up the chain
As clients begin to take more control of the servicing element,
how will that position the providers in the value chain?
With these new technologies potentially disintermediating
certain functions traditionally performed by securities services
providers, they will instead have to choose where in the value
chain they specialise.
"The future of custody banking and securities services will
largely centre around where in the value chain you can pick to
serve, with more data being captured on a self-service basis,”
says Deutsche Bank’s Nielsen. “The more commoditised func-
tions of transaction banking and securities services will most
likely become self-serviced, but the more high-touch and com-
plex functions will still be carried out by banks.”
What this means is while the client will have greater control
over the service of data, there will still be a need for a provider
to interact with, especially around more complex data sets.
"Banking will become more like an airline service where you
can check in yourself and drop off your bag, but you would
always have a need for an advisor. There will always be a need
for a personal discussion within the value chain, which custody
banks will fill,” adds Nielsen.
By moving up the chain, the benefit for custodians is that they
will be able to shift resources away from mundane, manual tasks
and instead focus on automation and higher revenue projects.
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Global Custodian
Spring 2019
"The reward of the investment in
self-service tools offers both clients and
us the capacity, and the ability to deploy
resources on strategic enhancements like
data analytics moving up the value chain
on self-service,” says Citi’s Panjwani.
"We are seeing a 100% take up com-
pared to two years ago when clients were
asking us to provide them data to down-
load. Clients are now accessing our sys-
tem using STP protocol and other means
to upload the data onto their platforms.”
Custodians will have to ensure that the
fundamentals of asset safekeeping are still
there, but it is on them to provide value
where they can. That seems to be evident
with self-servicing. However, like with
any change, the biggest hurdle is client
adoption, and whether they are willing to
change. This could differ depending on cli-
ent size, and clients will need to be encour-
aged to take on self-servicing elements.
The industry may not be ready for a
full self-service model just yet, but the
technology is there and as it matures in
the industry, self-servicing securities
services could become a very real feature,
benefiting both client and provider.