Fintechs or third-party vendors have taken a more prominent role in the custody ecosystem over the last couple of years due to their ability to either address industry issues that a single custodian cannot resolve or offer specific functionality such as proxy voting or class actions. As Tom Casteleyn, EMEA head of custody JP Morgan will explain in a session at the upcoming PostTrade 360° 2025 conference titled “How custodians and other platform providers play the third part services game”, the custody ecosystem is a complex entity.
“In the past, in-house builds were combined with in-house hosted vendor solutions,” he says. “These vendor solutions are very different to those offered by fintechs because the latter are generally run on a business process outsourcing basis.”
This approach raises questions around scalability, resilience, and security for cloud-based solutions and governance.
“It is important to understand the difference between applications run in-house and hosted solutions and to make sure that the control, governance, contractual relationships, economic model, and resiliency are appropriately managed,” adds Casteleyn. “This is even more relevant now that these industry solutions are gaining in importance.”
Meeting standards
A number of custodians are shareholders in leading fintechs such as Proxymity and Access Fintech, which provides an opportunity to ensure these third-party vendors are working to the same standards as custodians in terms of strategy, technology, and regulation.
To meet client demand for data and new features, deliver enhanced scalability, and develop further automation along the value chain, custodians like JP Morgan are continuously upgrading and expanding their technology platforms.
Casteleyn hopes that the session will be of interest to non-custodians and clients of custody banks. It aims to educate the audience in the differences between industry utilities and the core processing platforms of the custodians.
“As custodians, we are working hard to make sure that the ecosystems and technology solutions we provide to our clients are extremely robust, scalable, and resilient,” he says. “We spend a lot of time and energy on making sure that is the case.”
Have you signed up yet to be in Stockholm for PostTrade 360° 2025 on 3–4 September? It’s free for securities operations pros, both trading and investor sides! (Vendor firm representatives need a sponsorship agreement.) The powerful event website lets you register, see all other delegates, schedule sessions and meetings, and message. Find all related articles, including loads of teaser interviews, here.
