Custody Service Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2021-2031

The Global Custody Service Market is projected to expand from USD 42.21 Billion in 2025 to USD 60.32 Billion by 2031, reflecting a compound annual growth rate (CAGR) of 6.13%. These services involve the protection and management of financial assets for institutional investors, covering essential duties like trade settlement, income collection, and corporate action processing across various international jurisdictions. Growth in this sector is largely fueled by the increase in cross-border investment activities and the rising complexity of global regulatory compliance, which demands specialized infrastructure to minimize risk. Furthermore, the ongoing institutionalization of savings within emerging markets continues to drive demand for these secure asset servicing frameworks.

According to the Securities Industry and Financial Markets Association, global equity market capitalization rose to $126.7 trillion in 2024, highlighting the growing volume of assets necessitating professional administration and secure intermediation. Despite this expansion in asset value, the industry confronts a major obstacle in the form of increasing fee compression. This financial strain forces custodians to sustain significant capital expenditures to ensure technological resilience, all while navigating reduced profit margins on standard transactional services.

Market Drivers

A primary catalyst for the growth of the custody sector is the significant rise in global assets under management held by institutional investors. As entities such as pension funds, sovereign wealth funds, and insurance companies amass capital, the demand for independent safekeeping, trade settlement, and income collection grows accordingly. This surge in volume requires custodians to expand their operational capabilities to manage the vast quantity of securities while ensuring precision in asset servicing. Data from the Investment Company Institute's '2024 Investment Company Fact Book' indicates that worldwide regulated open-end fund assets reached $70.9 trillion by the end of 2023, creating a strong mandate for robust custodial infrastructure to guarantee regulatory compliance and asset security across various jurisdictions.

Concurrently, the integration of advanced automation and digital asset servicing is transforming operations for global custodians. Financial institutions are focusing on technological modernization to adapt to shortened settlement cycles and the incorporation of tokenized assets into established systems. This shift towards technology is crucial for mitigating risks associated with manual intervention and controlling operational costs in a pressure-filled fee environment. According to Broadridge Financial Solutions' '2024 Digital Transformation and Next-Gen Tech Study' released in May 2024, firms intend to boost investment in next-generation technologies by more than 20% over the coming two years. This digitization trend supports the immense scale of leading firms; for example, BNY reported in 2024 that its assets under custody and/or administration climbed to $52.1 trillion, highlighting the essential role of technologically advanced platforms in maintaining market stability.

Market Challenges

The global custody service market is significantly constrained by intensifying fee compression, which reduces operating margins even as asset volumes continue to grow. As institutional investors consolidate, they gain increased leverage to negotiate lower fees for asset servicing contracts. This decline in pricing power occurs alongside a steep rise in operational costs, as custodians are required to invest heavily in expensive technological infrastructure to satisfy strict cybersecurity protocols and regulatory standards. As a result, the disparity between the cost of providing services and the revenue earned per asset unit is widening, which directly impacts the profitability of fundamental custodial activities.

This financial pressure creates an environment characterized by high volumes and low margins, hindering custodians' ability to pursue organic growth or reinvest in business development. Although the total value of assets requiring safekeeping is increasing, the revenue derived from these assets is not growing at a similar pace. For example, the Securities Industry and Financial Markets Association noted that global fixed income markets outstanding hit $145.1 trillion in 2024, demonstrating the vast scale of assets needing service despite the downward pressure on fees. This discrepancy forces custodians to manage increasing liabilities with diminishing returns, thereby limiting the capital available for future innovation.

Market Trends

The widespread adoption of ESG compliance and sustainability reporting tools is fundamentally altering global custody offerings, pushing providers to expand beyond traditional safekeeping into complex non-financial data administration. Institutional investors now demand detailed data to satisfy regulatory disclosure requirements and align their portfolios with specific environmental goals, necessitating that custodians integrate sustainability analytics into their reporting systems. This evolution shifts the custodian's role from a backend administrator to a vital partner in regulatory compliance and reputation management. In its 'Future of Asset Management: A Trends Report' from October 2024, BNY noted that 87% of respondents expect to enhance their ESG strategies, highlighting the critical need for these specialized reporting functions.

At the same time, the market is experiencing a significant shift toward outsourced middle-office and trade support services as custodians aim to generate value higher up the investment chain. In response to the commoditization of core services, providers are taking on complex tasks such as trade execution and data aggregation, enabling asset managers to focus on alpha generation while converting fixed operational costs into variable ones. This approach integrates custodians into the investment lifecycle, establishing a seamless "front-to-back" service model that strengthens client relationships. According to Northern Trust's May 2024 whitepaper, 'Driving Growth in Asset Management 2024', 83% of respondents considering outsourcing intend to do so to improve their data management capabilities, emphasizing the importance of data proficiency in this expanding service area.

Key Players Profiled in the Custody Service Market

• 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.

Report Scope

In this report, the Global Custody Service Market has been segmented into the following categories:

Custody Service Market, by Type:

• Equity
• Fixed Income
• Alternative Assets
• Others

Custody Service Market, by Service:

• Core Custody Services
• Ancillary Services
• Core Depository Services
• Others

Custody Service Market, by Region:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Custody Service Market.

Available Customization

The analyst offers customization according to your specific needs. The following customization options are available for the report:

• Detailed analysis and profiling of additional market players (up to five).

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