A large number of institutional investors are expected to review their custody arrangements in 2015, says BNP Paribas Security Services.
The influx of tender activity is attributed to the APRA-mandated requirement upon trustees to review their material outsource providers on a regular basis, said a statement by BNP Paribas.
BNP Paribas also noted that a foremost focus for custodians is meeting regulation, namely due to APRA reporting requirements under the Strong Super reforms.
An area expected to see growth is collateral management and clearing services, which have been in high demand due to the impacts of the Dodd-Frank Act and European Market Infrastructure Regulation.
BNP Paribas Securities Services Australia and New Zealand chief administrative officer Daryl Crich said: “If you are an asset manager with responsibility for the trade you need automated solutions because you no longer have the 24 to 48 hour window to match trades. It is now minutes.”
“They have to be connected to core providers and the middle office,” Mr Crich said.
“With the implementation of Stronger Super, funds turned to their custodian to pull together a solution.
“It’s going to be interesting as funds and clients come to terms with how they’re going to meet their obligations if their provider is not able to offer an end-to-end solution,” Mr Crich said.
Mr Crich also commented on the evolving influence of ‘big-data’ on the custody industry.
“Data can also be used to develop better distribution and engagement strategies,” he said.
“This use of data goes beyond the traditional custodial service of maintaining the investment book of record and is going into the territory of ‘future-proofing’.
“The industry is also expected to make ongoing investments in technology such as investment performance reporting and risk analytics,” he said.
Investment organisations are not learning from their past experience when it comes to improving investment committee practices and governanc...
Half of Australian investment management professionals believe the coronavirus pandemic will trigger unethical behaviour in the industry, ac...