[ N E W S R E V I E W ]
Revenues across a dozen of the largest custodians fell by just 1 % in 2020 when compared with the previous year , a lesser drop-off than many expected following a difficult 12 months . Data released by research firm Coalition showed that overall securities services revenues hit $ 35.7 billion , with custody income 3 % down year-on-year , but fund services 3 % up . The fund services revenues recorded for the year were the highest since 2013 , spurred by servicing revenues for exchange traded funds ( ETFs ) and increased outsourcing . Revenues stemming from Europe , Middle East and Africa ( EMEA ) rose by 1 % collectively , while Asia-Pacific ( APAC ) and Americas fared less well with 4 % and 3 % declines , respectively . The APAC fall comes after four years of continued growth . In addition , Coalition noted a “ significant underperformance ” in the agency securities lending sector , while collateral management revenues grew . The growing number of headwinds facing custodians was amplified by the challenges arising from the COVID-19 pandemic ; however , the transactions fees from the resulting market activity offset some of the income drops across custody banks . The minor decline across the top 12 securities services organisations is not as steep as some predicted last year . Even towards the end of 2020 , the International Securities Services Association ( ISSA ) and Oliver Wyman predicted that the end of year results would show anywhere between a 5-15 % decline year-on-year . One of the standout performances from 2020 was JP Morgan , which saw a 2 % increase in securities services revenues and assets under custody rise 15 % to $ 31 trillion . The milestone follows a period of increased investment by the US bank into its securities services business . Over the past year , JP Morgan leveraged new technologies from FinTech firms Saphyre and H4 to digitise its client onboarding and global custody contracts processes respectively , while also securing mandates with Finland ’ s government pension fund and Australian superannuation fund Local Government
Securities services revenue decline in 2020 was not as severe as expected
Overall securities services revenues dropped only marginally in 2020 compared with 2019 , with the fund services sector even producing record returns .
16 Global Custodian Spring 2021