Sub-Custodian Network Management in a Post-Pandemic World

Previously published in the Journal of Securities Operations and Custody (content dates from December 2021).

This paper explores the evolving role of the network manager within the asset servicing industry, as well as the implications of its growing digital market infrastructure and the rapid technological shifts we have seen through the COVID-19 pandemic.

It identifies areas of challenge and opportunity for network managers in continuing to deliver risk management, commercial oversight, relationship management and market advocacy for investors.

It outlines a vision for sub-custodian network management in a post-pandemic world, and:

• Examines how the COVID-19 crisis affected risk assessment functions and the approach to due diligence;
• Considers the wider roles network managers play in market advocacy, intelligence gathering, relationship management and infrastructure development, and looks at whether the global pandemic has accelerated a bifurcation of these roles;
• Makes the case for continued on-site meetings when the pandemic ends and examines new considerations for such visits; and
• Explores some of the components that will shape the future evolution of the network manager, including the impact of digitalisation and technological innovation and trends and themes transforming the custody business itself

Successful network managers should embrace the digital paradigm, and support and enable their sub-custodians to do the same. As sub-custodian business models change and markets evolve, network managers should continue to leverage their high level of market expertise to support their own organisations in their decision making.

Network managers should increasingly become agents of change, as they navigate new complexities and identify opportunities for key stakeholders across the sub-custodian network.