Custody in a Real-Time World

The post-trade industry is increasingly moving towards real-time and “always-on” driven by accelerating technological advances, shorter settlement cycles, and evolving customer expectations. Shortened settlement cycles, such as the move to T+1 in various global markets (U.S., UK, Europe, Brazil), are a critical driver and a primary focus for the industry. As a result, the role of the custodian is evolving. Custodians are no longer just safekeepers of clients’ assets; they are increasingly an enabler to clients’ shifting business models and operations. 

Evolving Needs, Evolving Approach

Clients today are increasingly sophisticated, and their expectations are driving the pace of change. For example, there is a strong and growing need for instant insights into portfolios, real-time data for informed decision-making, and a consolidated, global view of assets and activities.

Clients also want to settle trades across markets and currencies in or near real time, manage corporate actions as they occur, and access FX and cash solutions at their convenience.

There is also a paramount expectation for direct and seamless access to local market infrastructures, which is crucial for efficient liquidity management and FX execution. As such, clients are increasingly viewing custodians as proactive partners who can help them adapt to significant market changes, such as the transition to T+1 settlement cycles, and navigate complex regulatory landscapes.

Building Blocks for the Future

Meeting these expectations requires more than technology; it requires approaching custody unconventionally. The delivery of 24/7 real-time custody involves interconnected building blocks – from settlements and asset servicing, to tax, corporate actions, cash, liquidity and FX- each advancing at varying paces towards an end-state of real-time. At Citi, our platform enables single-event processing across the chain of custody, near-instant settlements, and continuous liquidity management. This, in turn, reduces operational friction, improves accuracy, and allows clients to respond immediately to market events.

As change continues to gather pace, real-time custody allows clients to manage risk, optimize portfolios, and react to market conditions as they happen, across a range of asset classes.

It is a distinct competitive advantage, not just an innovation for the sake of innovation.

For clients, it is critical that they are able to capture the immediate value of innovation, which helps them remain at the cutting edge of what is possible in custody and enables their resilience against the increasing pace of the global markets and business environment.

Our objective is straightforward: to make it easier for clients to act decisively and confidently, with custody that works in real time, everywhere they operate.