Custody

Today we're a $3 billion revenue business with $33 trillion of assets under custody, averaging a daily notional settlement of a trillion dollars, processing 55 million trade volumes a year, and averaging $200 billion in deposits. We offer services in over a hundred markets with the third largest custodian globally and number one in both Europe and Asia.

It is been an exciting journey, and if we think about what the future of custody holds, there are a few themes that stand out, such as tokenization, digital assets, ai, cloud technology, big data and digitization Technology not only allows to further speed up processing across more markets and instruments, but also to rethink some of the building blocks of the current post-trade world as legacy record keeping systems near the end of their life. We will continue to see much needed investment in the next generation of technology infrastructure across security services.

This will include componentized and cloud-based applications where permitted supporting a strategic operating model, but may also open up opportunities for re-imagining how data and records are stored and controlled across our industry and optimize their value for investors, intermediaries and issuers, distributed ledger technology and tokenization offer a vision of a secured shared ledger infrastructure, which will provide much greater transparency and efficiency to market participants, along with the opportunity for significantly enhanced automation across market participants, new operating models and new services.

Shared networks can also reduce the reliance on central infrastructures and create greater systemic resilience in the future. Data delivery protocols will continue to move towards APIs to enable precise data sets to be delivered to and from cloud platforms. Most clients are rolling out some level of cloud adoption, ranging from data warehouses to support large scale computations to the migration of the wider in-house technology platforms into the cloud Tokenization and the ability to use distributed ledger technology and financial services use cases has been proven. The challenge for our industry is now to work on demonstrating how the technology can deliver value at scale.

This will involve two key elements, regulatory engagement and industry corporation on platforms, standards and interoperability. Unlocking the value of data generated by service providers will become a key service offering to clients as changes in technology enable an evolution of the current basic settlement of an executed trade into a valued holding and high level analytical data into fully normalized high speed data rich environment where a range of data services can be offered to clients. Clients Today face a number of challenges to improve decision making, reduce costs, and address the inconsistent data formats, shapes and attributes.

We are moving into an era of data-centric operating models along with the ability to cater for multiple sources, normalize, enrich, and provide data in multiple outputs that meet clients, partners, and regulators, complex and varied needs. This all comes at a time where transaction volumes continue to increase and settlement windows continue to become even shorter. Custodians are uniquely positioned as they have the buy side positions, the transactions, the vendor data market data, and the necessary scale and expertise to address the challenges.

Digitalization of operating models by custodians using flexible FinTech tools to provide realtime operational data flows and enhanced data content is now widespread. These focus on the provision of enhanced real-time data across the life cycle of an operational process, whether it be transactions, proxy voting, account opening, margin payments, or collateral movements. As key to operational efficiency are the integrated workflows, audit trials, and multiple party capabilities. Data delivery will also expand significantly to encompass complex analytical data and data science in ready to use formats.

In this context, it's natural that relationships will also evolve to reflect the new data-centric operating models and those providers who have the capability to provide clients with a flexible data service embedded into a data-centric operating model at a commercial price point will become the core providers. Meanwhile, global momentum is gathering pace on the shortening of the settlement cycle with the UK committing to a move to T one by 2027.

Alongside ongoing settlement acceleration analysis across Europe, Australia, and other global markets, the transition to T one settlement in the US, Canada and parts of Latin America was a significant industry change, which has required continuous focus and dialogue with industry groups, regulators, clients, brokers, market infrastructures, and vendors. The JP Morgan global custody business stands poised to lead and innovate into the next half century. Driven by the same spirit of progress that has defined its remarkable journey.