[ T H O U G H T L E A D E R S H I P | S & P G L O B A L ] to concerns about compliance failures.” However, there is evidence that this mindset is shifting. The industry is beginning to recognise that maintaining the status quo is no longer sustainable. Sankar pointed out that while change has been happening, the challenge has been the speed of transformation.“ There’ s no lack of commitment to improving account opening,” he said.“ The problem is that the sheer scale of the task has made it difficult to execute efficiently.”
The role of technology The panellists agreed that leveraging technology is the key to overcoming these challenges. By integrating automation, data analytics and cloud-based solutions, financial institutions can streamline processes, reduce costs and enhance client experiences. Maxwell illustrated this point with an analogy:“ If I want to order a takeaway, I use Deliveroo. They don’ t cook my food, but they have the infrastructure to connect me with the restaurant, process payments, and provide real-time updates. This level of transparency and efficiency should exist in custody account opening. Why should we tolerate inefficiencies in our professional lives that we wouldn’ t accept in our personal lives?” To achieve this level of seamless integration, the panellists highlighted how industry must focus on three key areas. The first is around interoperability and API connectivity, ensuring that all market participants, from buy-side firms to custodians and sub-custodians, can communicate efficiently through standardised data models and APIs. The second is around the digitisation of documentation- transitioning from manual document handling to automated data extraction and validation processes to minimise errors and improve processing speed. And finally, cloud-based solutions – which was championed by McNally in particular who highlighted the benefits of the cloud’ s scalability, security and seamless integration. Leveraging the scalability and flexibility of cloud computing can help the industry break down data silos, enhance security and drive real-time process improvements, he said. McNally went on to emphasise that regtech solutions and AI-driven platforms are already making a difference.“ AI-powered tools can scan and interpret regulatory changes in realtime, flagging compliance requirements across jurisdictions,” he explained.“ Smart contract technology can enforce compliance rules during onboarding, further reducing risk and inefficiencies.”
Overcoming barriers to adoption Despite the clear benefits of technology, adoption remains a challenge, with budget constraints being the primary barrier.
The industry must take a long-term view, recognising that investments in technology yield significant returns over time. Sankar added that buy-side firms must also be reassured that integrating with new digital solutions does not require significant effort or disruption.“ We’ ve built solutions that offer multiple points of entry – whether through APIs, third-party integrators, or dedicated user interfaces – so that clients can connect in the way that works best for them.” As the discussion drew to a close, the panellists agreed that transformation will require industry-wide collaboration. Historically, firms have developed solutions in silos, but there is now a concerted push to work together.“ We need to stop viewing custody account opening as a competitive differentiator,” Sankar said.“ It should be a standardised process that benefits the entire industry.” Maxwell echoed this sentiment, urging the industry to be proactive:“ Be brave. Be curious. Look for solutions that challenge the status quo. If we don’ t evolve now, we risk being left behind.” With regulatory expectations evolving, client demands increasing and technology advancing at an unprecedented pace, the time for action is now. Those who embrace digital transformation will not only drive efficiencies but also enhance their competitiveness in an increasingly dynamic market.
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