Custodian banks are set to undergo far-reaching changes. Independent asset managers now expect greater digitalisation, operational efficiency and value-added services. Conducted by zeb Consulting and Noveo Conseil, the EAM & Custodian Bank Study 2026 analyses the evolving role of custodian banks and their relationships with EAMs. Clara Cardaun, co-author of the study, outlines the key findings.
How should custodian banks adapt to the new realities of the EAM market?
The independent asset manager market remains one of the most attractive segments of the wealth management industry. At the same time, competitive conditions have changed profoundly. Regulatory requirements have become stricter, the sector is continuing to consolidate, and end clients now expect digital experiences comparable to those they encounter in other areas of their daily lives. In this environment, the mere custody of assets is inevitably becoming a commodity.
Custodian banks must therefore fundamentally redefine their role. They can no longer limit themselves to providing custody and execution services. They must now position themselves as genuine strategic partners, providing EAMs with the infrastructure and services necessary for the development of their business. The main challenges facing independent asset managers today no longer relate solely to investments, but also to onboarding, compliance, reporting, operational efficiency and technology.
Banks must therefore demonstrate a much greater capacity to adapt. They must offer efficient, digital and standardised processes, whilst retaining sufficient flexibility to support a wide range of business models. A one-size-fits-all approach is no longer viable in a market where specialist firms managing a few hundred million in assets coexist with more institutional players administering several billion.
How do you see the role of custodian banks evolving in relation to EAMs?
The custodian bank of the future will enable EAMs to develop their business model. Independent asset managers wish to retain the two elements that constitute their true source of value creation: client relationships and investment decisions. Everything else is increasingly open to partnerships.
With increasing regulatory and operational complexity, EAMs expect their banking partners to reduce friction and provide the necessary infrastructure to enable them to focus on their clients and on growing their business.
The relationship between the EAM and the custodian bank is thus evolving from a purely transactional one into a genuine strategic partnership. The bank’s role is not to replace the independent asset manager, but to enable them to be more efficient, more adaptable and, ultimately, more competitive.
The best custodian banks will be almost invisible to the end client, but essential to the fund manager. Their value will rest on the quality of their infrastructure, the reliability of their systems and their ability to manage complex requirements.
What functions must custodian banks now develop beyond custody services in order to remain competitive?
Technology is undoubtedly the key differentiating factor. EAMs expect fast and seamless onboarding processes. Paper-based procedures or manual interventions are increasingly seen as a hindrance. They also expect genuine bidirectional APIs enabling a seamless exchange of data between the bank and their own systems. It is no longer simply a matter of receiving account and transaction data, but also of being able to transmit orders and instructions digitally.
The quality of the interconnection has become a decisive factor. Data must be reliable, readily available and immediately usable. APIs only create value when they support real operational processes.
Another key differentiating factor lies in the ability to support an international client base. Banks with advanced compliance expertise and scalable operational models are increasingly able to set themselves apart through their capacity to manage complex situations arising from clients’ different countries of residence and cross-border arrangements. Competitiveness today rests on three pillars: digital capabilities, regulatory expertise and value-added services.
How have the LSFin and the LEFin most transformed the relationship between custodian banks and external asset managers?
These two laws have accelerated the professionalisation of the entire EAM sector. The days when independent asset managers could operate with relatively informal structures are over. Requirements regarding authorisation, governance, client documentation and due diligence are now significantly higher. This has resulted in a considerably heavier administrative burden.
Consequently, the relationship between EAMs and custodian banks has become much more institutionalised. Managers now place greater emphasis on a partner bank’s ability to support them within a regulated, adaptable and sustainable framework. At the same time, they remain cautious about outsourcing areas that constitute their core value proposition, namely client relationships and investment decisions.
A clear division of roles has thus emerged. EAMs retain responsibility for client relations, whilst banks are increasingly expected to demonstrate their ability to provide the infrastructure necessary for efficient operations.
Whilst technology has become a key factor in the choice of a custodian bank, what are EAMs’ main expectations in this regard today?
EAMs expect seamless integration between their own systems and those of the custodian bank. They no longer want to waste time checking that data has been transferred correctly or carrying out manual reconciliations.
Two-way connectivity has become essential. Data must flow automatically and seamlessly between the two parties. Larger EAMs are increasingly expecting an API connection with their portfolio management systems. Some even go so far as to say that, in future, they will no longer work with banks that do not offer this type of interface.
Technology has thus evolved from a mere convenience to a prerequisite for growth. It is no longer simply a matter of marginally improving operational efficiency. Technological expertise is now a key factor in competitiveness.
What will the value proposition look like for a custodian bank capable of meeting the expectations of tomorrow’s EAMs?
It will be based on three levels.
The first level comprises fundamental services such as custody, execution, financing and basic banking services. These activities are becoming increasingly standardised and are no longer sufficient, on their own, to set a bank apart.
The second level concerns infrastructure, which is now a genuine differentiating factor. It encompasses, in particular, digital onboarding, reporting, data quality, compliance processes, operational efficiency and multi-booking capabilities.
The third level comprises value-added services, such as research, access to specialists, tax advice, wealth planning and the provision of investment solutions.
Ultimately, a custodian bank’s value proposition must enable EAMs to address three major challenges: serving their clients better, scaling up their business and strengthening their own competitive edge.
What new expectations are EAMs now expressing with regard to their custodian bank?
The key change is that EAMs are no longer simply looking for a bank with which to hold their assets. They now expect their banking partners to offer genuine digital integration capabilities, automated data exchange, faster onboarding processes and support in dealing with increasingly complex regulatory requirements.
They also expect more effective reporting solutions, greater transparency and a consolidated view of their portfolios, even when these are spread across several custodian banks.
Larger EAMs, moreover, are adopting requirements similar to those of institutional clients, with dedicated service models, specialist contacts, clear governance structures and professional management of operational issues.
Ultimately, the central issue has changed. Five years ago, EAMs primarily chose a bank for the custody of their assets. Today, they are looking for a partner capable of actively contributing to the efficiency, growth and sustainability of their business.
How should custodian banks adapt their business model in the face of the emergence of larger, more integrated and more demanding EAMs?
Large EAMs are increasingly operating in a similar way to institutional clients. They have their own technology platforms, high compliance standards and greater bargaining power. Faced with this increasing sophistication, custodian banks must professionalise their service model, with teams dedicated to EAMs, clear governance structures and greater accountability throughout the relationship.
Pricing models will also need to evolve. Large EAMs have growing bargaining power over custody fees. Banks will therefore need to place greater emphasis on the quality of their infrastructure, their value-added services and their specialist expertise, rather than relying primarily on traditional custody-related revenue streams.
A multi-tiered service model is likely to gradually become the norm: highly automated processes to maximise operational efficiency, complemented by personalised support from experts for the most complex situations.
In future, successful banks will be able to combine scalability, operational excellence and digital capabilities, whilst clearly demonstrating their added value to EAMs.