Contributing Firms:
The role of the custodian
The future role of the custodian has been described as a shift from an asset custodian to a broader data custodian. Please comment on the changing role of the custodian and how you anticipate it will evolve in the coming years.

Meliosa O’Caoimh, Country Head, Ireland, Northern Trust: As their global custodian and asset servicing partner, our clients rely on us for the automated solutions, technology infrastructure and expertise that helps them simplify the complexity of global markets and safeguard their assets.
Meliosa O Caoimh
Meliosa O Caoimh

Our services support them as they navigate the range of investment opportunities they face. And we support them by delivering process efficiencies and meeting their demands for data, transparency and insight. This includes providing the foundational data on which they manage their investments.

Data is the lifeblood of any investment organization, and clients who make maximum use of their data into the future will generate meaningful market advantage. For many clients, we act as an outsourced data manager – enriching, validating and providing a single source of data for their everyday investment, trading and business activity.

At Northern Trust we are evolving our global platform to serve as an agile, universal technology and data framework that can shape the work we do as our client’s asset servicer to support their data priorities and continually align with their business goals.

Looking to the continued evolution of our industry, we will continue to see the co-existence of electronic with newer digital technologies that will continue to drive industry transformation. We will see the emergence of digital marketplaces, which will result in an increased number of markets in which custodians such as Northern Trust offer our services. Traditional and digital markets will co-exist with new types of solutions, products and technology.

Fergus McNally, Partner, EY: As markets become increasingly globalised, we see the integration of automation and artificial intelligence into custodian’s BAU (business as usual) assets become digitised - through tokenisation or other means - and we see increasing regulatory requirements.
Fergus McNally
Fergus McNally

We also see increasing demands for custodians to hold more data for the assets under custody and their fund clients.

As this evolves, it could see custodians holding full datasets of information of the trade lifecycle of funds, in a near real-time basis, and being that “broader data custodian”.

The CBI released a consultation paper earlier in 2023 on the potential for macro-prudential supervision for the fund market, to ensure that this segment of the financial sector is more resilient to stresses and less likely to amplify adverse shocks.