Asset Servicing Global Market Report 2022

Major players in the asset servicing market are National Australia Bank Limited, CACEIS, BNY Mellon, HSBC, JP Morgan, Citi, The Bank of New York Mellon Corporation (BNY Mellon), State Street Corporation, UBS, and Clearstream (Deutsche Börse Group).

The global asset servicing market is expected to grow from $712.8 billion in 2021 to $784.03 billion in 2022 at a compound annual growth rate (CAGR) of 10%. The market is expected to grow to $1,149.92 billion in 2026 at a compound annual growth rate (CAGR) of 10%.

The asset servicing market consists of services for wealth management companies and capital markets.Asset servicing comprises services such as reorganization and proxy services, safekeeping services for physical securities, dividends, and electronic registration and transfer of securities.

The assets servicing industry is a critical component of global financial markets and plays a vital role in the safekeeping of financial assets.

The main services offered in asset servicing are fund services, custody and accounting, outsourcing services, and securities lending.Securities Lending is the process of lending shares of stock, commodities, derivative contracts, or other securities to other investors or firms.

The borrower must put up collateral in the form of cash, other assets, or a letter of credit when applying for a securities loan. The services are offered to large enterprises, medium and small enterprises of capital markets, and wealth management firms.

North America was the largest region in the asset management market in 2021.Western Europe was the second largest region in the asset management market.

The regions covered in this report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, and Africa.

Globalization acts as a major driver for the growth of the asset servicing industry.According to a study on global asset servicing, nearly 60% of assets services in Assets Under Administration (AUA)/Assets Under Contract (AUC) predict that globalization is likely to be a strong driver for the asset servicing market’s growth over the coming years.

The players dealing in the assets servicing industry are majorly focusing on APAC markets and other growing economies.Moreover, according to the BNP Paribas Securities Services article published in January 2020, India was expected to experience impressive growth in assets management and servicing industry owing to the increasing working population, the rising buying power of the populace, and expected growth in the GDP of the country.

Thus, globalization creates a large avenue for the expansion and growth of the asset servicing market over the coming years.

The stringent regulatory framework is predicted to limit the growth of the asset servicing industry over the forecast period.According to Funds Europe’s asset servicing roundtable, rising global regulation is adding cost and risk to asset servicing, creating a requirement for asset servicers to constantly engage with the client and the regulators.

In addition to this, according to EY’s new opportunities for asset servicing study, nearly 75% of the companies see the impact of regulations as the greater risk facing the asset servicing industry. Therefore, the increased scrutiny from regulatory agencies is anticipated to hinder the asset service market’s growth in the coming years.

Robotic process automation (RPA)/ automation is a major trend shaping the growth of the asset servicing market.Robotic process automation alone could reduce the headcount by 60-70% in the assets servicing industry while also achieving cost savings of approximately 30-40%.

Robotic process automation (RPA) refers to a set of software tools known as bots or robots that are used to perform a repetitive or routine business process which is currently used by transaction processing teams or service centers.RPA can replace manual tasks involved in assets servicing such as reconciliation, trade processing, and reporting for regulators and clients, reducing the time required with cost-efficiency.

For instance, the ANZ Banking Group was one of the early ones to adopt RPA aggressively and automated its HR, finance, and technology processes in its Bengaluru hub creating thousands of bots.

In April 2020, JP Morgan has sought to take whole ownership of China International Fund Management (CIFM), a local assets management firm for an amount of $1 billion.This step was taken following China’s reforms on the elimination of caps on foreign companies taking full control of local assets management operations.

This acquisition is expected to enable JP Morgan’s long-term involvement with CIFM and strengthen the company’s position in the Chinese market. China International Fund Management (CIFM) was founded in 2004 and offers assets management and related services to China.

The countries covered in the asset servicing market are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, and USA.