Custody Service Market to Grow with a CAGR of 9.4% Globally through 2029
Increasing value of global financial assets, including
equities, bonds, and alternative investments are factors driving the global
custody service market in the forecast period 2025-2029.
According to TechSci Research report, “Global Custody
Service Market - Industry Size, Share, Trends, Competition Forecast &
Opportunities, 2029”, the Global Custody Service Market stood at USD 35.6 Billion
in 2023 and is anticipated to grow with a CAGR of 9.4% in the forecast period,
2025-2029. The custody service market, a linchpin of the global financial
infrastructure, plays a vital role in safeguarding and managing financial
assets for institutional investors and high-net-worth individuals.
The market has been witnessing dynamic shifts
influenced by a combination of macroeconomic trends, technological
advancements, regulatory changes, and evolving investor preferences. The
custody service market is characterized by a diverse ecosystem of custodians,
ranging from traditional banks and financial institutions to specialized
custody service providers and emerging fintech firms.
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The market has traditionally been dominated by
established global custodians with extensive networks, providing services to
institutional clients with complex and diverse investment portfolios. However,
the landscape is evolving with the entry of new players, including fintech
startups offering innovative solutions such as blockchain-based custody
services for digital assets. The increasing demand for specialization in areas
like environmental, social, and governance (ESG) investing, and the rise of
digital assets are reshaping the competitive dynamics of the market.
Traditional custodians are adapting their business models to incorporate
technological innovations and meet the changing needs of clients.
The custody service market is undergoing a profound
digital transformation, driven by technological innovations such as blockchain,
artificial intelligence (AI), and data analytics. Traditional custodians are
investing heavily in technology to enhance operational efficiency, automate
routine tasks, and provide real-time reporting capabilities. The integration of
distributed ledger technology (DLT) and blockchain is particularly notable,
especially in the context of managing digital assets. The adoption of
application programming interfaces (APIs) and cloud-based solutions is also on
the rise, enabling custodians to offer more flexible and scalable services.
This trend aligns with the broader financial industry's move toward
digitization, enhancing the overall client experience and optimizing
back-office operations.
The globalization of financial markets is a major
driver for the custody service market. As institutional investors and
high-net-worth individuals diversify their portfolios across different
geographies, the demand for cross-border custody services increases. Custodians
with a global presence and well-established networks of correspondent banks and
sub-custodians are well-positioned to serve clients engaged in international
transactions. The ability to provide efficient settlement services, navigate
diverse regulatory environments, and offer expertise in local markets are key
factors driving the growth of custodians with a global footprint. The
interconnectedness of financial markets and the trend towards globalization ensure
that custody service providers play a critical role in facilitating
international investment strategies.
The continuous increase in global wealth and asset
accumulation is a fundamental driver for the custody service market.
High-net-worth individuals, family offices, and institutional investors seek
secure and reliable custody services to safeguard and manage their expanding
portfolios. The growing affluence of emerging markets and the expansion of the
global middle class contribute significantly to the increased demand for
custody services. As individuals and institutions accumulate a greater volume
of financial assets, custodians play a pivotal role in providing safekeeping,
record-keeping, and administration services. The proliferation of diverse asset
classes, including traditional securities and alternative investments, further
amplifies the need for sophisticated custody solutions capable of handling a
broad range of financial instruments.
The global Custody Service market is segmented into type,
service and region.
On the basis of type, equity assets
remain dominant in the custody service market due to their global popularity,
liquidity, and foundational role in investment portfolios. While fixed income
and alternative assets are significant, their dominance may be more
sector-specific, catering to investors with specific risk and return
objectives. The dynamics, however, may evolve with changing market conditions
and investor preferences.
Based on region, North America has
asserted dominance in the custody service market for several compelling
reasons. The region's financial infrastructure, characterized by
well-established regulatory frameworks, advanced technological capabilities,
and a robust legal environment, positions it as a global leader in custody
services. The United States, in particular, boasts a mature and sophisticated
financial system, home to major financial institutions and custodians that play
pivotal roles in safeguarding and managing assets for institutional investors
and high-net-worth individuals.
Major companies operating in global Custody
Service market are:
- Axis Bank Ltd.
- DBS
Bank Ltd.
- Deutsche
Bank A.G.
- Edelweiss
Custodial Services Ltd.
- HDFC
Bank Ltd.
- Hong
Kong & Shanghai Banking Corporation Ltd.
- ICICI
Bank Ltd.
- Infrastructure
Leasing & Financial Services Ltd.
- Kotak
Mahindra Bank
- Orbis
Financial Corporation Ltd.
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“The custody
service market is at the nexus of profound changes influenced by technological
advancements, regulatory developments, and shifting investor preferences. While
challenges such as cybersecurity risks, regulatory complexities, fee
compression, and the emergence of digital assets pose hurdles, custodians also
find themselves at the forefront of exciting opportunities. The ongoing
digital transformation, coupled with the rise of digital assets and the
increasing focus on sustainability, demands that custodians adopt an adaptive
and forward-thinking approach. Success in the custody service market hinges on
the ability to navigate challenges, leverage technological innovations, comply
with evolving regulations, and meet the diverse needs of a client base with
increasingly complex and globally diversified investment portfolios.” said Mr.
Karan Chechi, Research Director with TechSci Research, a research-based
management consulting firm.
“Custody Service Market – Global Industry Size,
Share, Trends, Opportunity, and Forecast, Segmented By Type (Equity, Fixed
Income, Alternative Assets, Other), By Service (Core Custody Services,
Ancillary Services, Core Depository Services, Others), By Region, By
Competition, 2019-2029, has evaluated the future growth potential of global Custody
Service market and provides statistics & information on market size,
structure and future market growth. The report intends to provide cutting-edge
market intelligence and help decision makers take sound investment decisions.
Besides, the report also identifies and analyzes the emerging trends along with
essential drivers, challenges, and opportunities in the global Custody Service market.
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