Market conditions that have supported the growth of securities services business models may be coming to an abrupt end, forcing providers to radically adapt to avoid a drop in growth.
According to a new report launched by Global Custodian and Boston Consulting Group (BCG), a number of market factors including changing client demands, deteriorating asset prices and rates, as well as the fallout of the COVID-19 pandemic, has meant the business models that have underpinned providers for years are now more fragile than they seem.
Asset appreciation and interest rate normalisation were among the favourable market conditions that have helped the securities services industry grow revenues by 4% since 2014.
However, last year showed the first signs of a potential drop-off as revenues shrunk. Core growth was flat but headwinds were amplified by price compression and a mix of market changes.
In order to combat this, the new report outlines the strategies that securities services firms are adopting to maximise existing sources of competitive advantage, and how they should stress test these strategies in the event of industry-wide disruption.
To access the full report, please click here and fill in the form to download your free copy.