The role of the custodian in servicing the reporting needs of the securities industry

Abstract

This article looks at the evolving reporting needs of the securities industry and how custodians are responding. Demand for reporting is booming driven by regulation and asset managers wanting to access operational information, oversee the services they have outsourced and share information with third parties, regulators and asset owners. Clients and custodians are also increasingly looking to extract value from their data for commercial purposes. As key intermediaries providing reporting between investment managers, counterparties and asset owners, custodians have a key role to play when it comes to reporting. Technology is the enabler. Custodians tend to favour building dedicated web-based reporting platforms instead of enhancing their various client platforms. Analytics and data visualisation tools, which present data in graphical forms giving clients intuitive insights into their data, are key features of reporting platforms. The opportunities for innovation and segmentation of what are otherwise commoditised custody products are plentiful and have already led to the launch of products including collateral management and liquidity solutions. While concerns about data security still have to be overcome, it is to be expected that the days of PDFs, Excel spreadsheets and e-mail attachments are numbered.