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Adapting custody services for modern asset managers and asset owners
Journal of Securities Operations & Custody,
17
(1),
6-13
(2024)
Abstract
Custodian banks have long been the unsung supporters of the investment industry, ensuring the smooth operation of transactions, servicing large institutions and infrastructure to support significant amounts of money management. As modern asset managers and asset owners continue to grow, however, they will demand more from their custodian- partners. The demand for services will come from more sophisticated, technology-reliant functions, and as such, the role of custodians will undergo a profound transformation. What has helped custodians be successful so far — reliance on people and process to deliver services — will not continue to help them in the future. This paper explores considerations for custodians and the adaptations required in their service models to meet contemporary challenges. We conclude that a fundamental shift is required away from traditional mindsets to ensure custodians remain central to supporting the needs of asset managers and asset owners.
Keywords: custodian; investment data; operating model transformation; data-as-a-service
The full article is available to subscribers to the journal.
Author's Biography
Bruce Russell is a Melbourne-based Senior Partner with Alpha FMC with 20+ years of industry and professional experience. With over 30 years’ industry experience, Bruce has provided strategic consulting advice to many leading investment organisations in Asia Pacific, helping them optimise their operating models to deliver the best investment outcomes to their investors and members. Prior to commencing his consulting career, Bruce spent eight years at HSBC Asset Management in a variety of senior roles across operations, product, and business change. He was previously a company auditor and is a qualified Chartered Accountant with a Bachelor of Commerce from La Trobe University in Melbourne, Australia. Bruce has delivered consulting engagements to more than 50 organisations, from the largest asset owners through to boutique investment managers.
Harry Coombes is a Melbourne-based Partner with Alpha FMC with 20+ years of financial services experience. Harry has supported multiple local and regional clients deliver operational improvements, middle and back-office selections and other strategic projects. With over 15 years’ experience in the middle and backoffice outsourcing market, Harry has a deep understanding of the product and regulatory requirements of asset managers and owners. He has experience with vendor and service provider selection, relationship management, commercial negotiation and service level agreement (SLA) structuring/negotiation. Harry holds a BSc (Hons) from the University of Birmingham, UK.
Jaibeer Singh is a Manager in the Sydney office of Alpha FMC. Jaibeer specialises in strategic implementation and operational improvement programmes spanning target operating model design, business process mapping, key performance indicators (KPIs) design, benchmarking and optimisation of process efficiency. Prior to joining Alpha, Jaibeer was a Strategy and Operations consultant with Monitor Deloitte (Strategy Consulting arm of Deloitte) in Sydney. He holds an MBA from UNSW (Sydney) and a Bachelor of Engineering from Indian Institute of Technology (IIT).
