Custody Service Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Type (Equity, Fixed Income, Alternative Assets, Others), By Service (Core Custody Services, Ancillary Services, Core Depository Services, Others), By Region & Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 42.21 Billion
CAGR (2026-2031)	6.13%
Fastest Growing Segment	Fixed Income
Largest Market	North America
Market Size (2031)	USD 60.32 Billion

Market Overview

The Global Custody Service Market will grow from USD 42.21 Billion in 2025 to USD 60.32 Billion by 2031 at a 6.13% CAGR. Global custody services encompass the safekeeping and administration of financial assets for institutional investors, including core functions such as trade settlement, income collection, and corporate action processing across multiple jurisdictions. The market is primarily driven by the acceleration of cross-border investment flows and the growing complexity of international regulatory compliance, which necessitates specialized infrastructure to mitigate risk. Additionally, the continued institutionalization of savings in emerging markets supports sustained demand for these robust asset servicing frameworks.

According to the Securities Industry and Financial Markets Association, in 2024, global equity market capitalization increased to $126.7 trillion, reflecting the expanding scale of assets that require professional administration and secure intermediation. Despite this underlying growth in substantial assets, the sector faces a significant challenge in the form of intensifying fee compression. This financial pressure compels custodians to maintain high capital expenditures for technological resilience while simultaneously managing shrinking profit margins on standard transactional services.

Key Market Drivers

The surge in global assets under management by institutional investors serves as a primary engine for the expansion of the custody sector. As pension funds, sovereign wealth funds, and insurance companies accumulate capital, the necessity for independent safekeeping, trade settlement, and income collection intensifies proportionally. This volume growth compels custodians to scale their operational capacity to handle the sheer magnitude of securities while maintaining precision in asset servicing. According to the Investment Company Institute, May 2024, in the '2024 Investment Company Fact Book', worldwide regulated open-end fund assets stood at $70.9 trillion at year-end 2023. This substantial accumulation of wealth mandates robust custodial infrastructure to ensure regulatory compliance and asset security across diverse jurisdictions.

Simultaneously, the adoption of advanced automation and digital asset servicing is reshaping the operational landscape of global custodians. Financial institutions are prioritizing technological modernization to navigate shortening settlement cycles and the integration of tokenized assets into traditional frameworks. This technological pivot is essential for reducing manual intervention risks and managing operational costs amidst ongoing fee pressure. According to Broadridge Financial Solutions, May 2024, in the '2024 Digital Transformation and Next-Gen Tech Study', firms plan to increase their investment in next-gen technologies by over 20% in the next two years to modernize operations. This trend toward digitization supports the massive scale of major players; for instance, according to BNY, in 2024, the bank reported that its assets under custody and/or administration had risen to $52.1 trillion, underscoring the critical reliance on technologically advanced platforms for market stability.

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Key Market Challenges

Intensifying fee compression acts as a substantial restraint on the global custody service market by squeezing operating margins despite a continuous rise in asset volumes. Institutional investors are increasingly consolidating, granting them greater leverage to negotiate lower basis points for asset servicing contracts. This reduction in pricing power coincides with a sharp increase in operating costs, as custodians must continually invest in expensive technological infrastructure to meet rigorous cybersecurity standards and regulatory requirements. Consequently, the gap between the cost of service delivery and the revenue generated per asset unit widens, directly limiting the profitability of core custodial functions.

This financial strain creates a high-volume, low-margin environment that hampers the ability of custodians to sustain organic growth or reinvest in business development. While the sheer value of assets requiring safekeeping continues to rise, the revenue capture from these assets does not grow proportionately. For instance, according to the Securities Industry and Financial Markets Association, in 2024, global fixed income markets outstanding reached $145.1 trillion, illustrating the immense scale of assets requiring servicing despite the downward pressure on fee structures. This divergence compels custodians to service growing liabilities with diminishing returns, ultimately restricting capital availability for future innovations.

Key Market Trends

The proliferation of ESG compliance and sustainability reporting tools is fundamentally reshaping global custody deliverables, moving providers beyond traditional safekeeping into complex non-financial data administration. Institutional investors increasingly require granular data to meet regulatory disclosure mandates and align portfolios with specific environmental values, compelling custodians to embed sustainability analytics directly into their reporting platforms. This shift transforms the custodian from a backend administrator into a critical partner for regulatory adherence and reputation management. According to BNY, October 2024, in the 'Future of Asset Management: A Trends Report', 87% of respondents anticipate their organizations increasing ESG strategies in general, underscoring the urgent demand for these specialized reporting capabilities.

Simultaneously, the market is witnessing a decisive expansion into outsourced middle-office and trade support services as custodians seek to capture value further up the investment chain. Faced with core service commoditization, providers are assuming responsibility for complex functions such as trade execution and data aggregation, allowing asset managers to focus on alpha generation while converting fixed operational costs to variable ones. This integrates the custodian into the investment lifecycle, creating a cohesive "front-to-back" service model that deepens client relationships. According to Northern Trust, May 2024, in the 'Driving Growth in Asset Management 2024' whitepaper, 83% of respondents considering outsourcing plan to do so to augment their data management capabilities, highlighting the critical role of data proficiency in this service expansion.

Segmental Insights

The Fixed Income segment is projected to register the fastest growth within the Global Custody Service Market due to a heightened demand for stable asset classes. Institutional investors are increasingly allocating capital to government and corporate bonds to mitigate risks associated with equity market volatility. This shift is further accelerated by monetary policies from institutions such as the Federal Reserve, which maintain elevated interest rates, thereby enhancing the yield attractiveness of debt instruments. Consequently, the surge in bond trading volumes necessitates robust custodial solutions for settlement and safekeeping, directly propelling the expansion of this segment.

Regional Insights

North America leads the Global Custody Service Market primarily due to the extensive concentration of major financial institutions and a high volume of assets under custody. This dominance is reinforced by the presence of key industry players such as The Bank of New York Mellon and State Street Corporation within the region. Furthermore, the strict regulatory framework maintained by the U.S. Securities and Exchange Commission ensures market stability and transparency. These elements create a secure environment that attracts continuous institutional investment and supports the ongoing expansion of asset servicing activities across the region.

Recent Developments

• In September 2024, Standard Chartered launched its digital asset custody service in the United Arab Emirates, marking a significant expansion of its securities services capabilities. The bank received a license from the Dubai Financial Services Authority to offer these safekeeping solutions within the Dubai International Financial Centre. This new service initially supported major cryptocurrencies such as Bitcoin and Ethereum, catering to institutional clients seeking regulated and secure storage for their digital holdings. The launch featured Brevan Howard Digital as the inaugural client, highlighting the growing demand for bank-grade custody infrastructure in the emerging digital asset economy.
• In September 2024, Northern Trust officially launched the Northern Trust Carbon Ecosystem, a digital solution designed to facilitate the management of institutional voluntary carbon credits. This platform, powered by the company’s Matrix Zenith digital assets infrastructure, executed its first live transactions, enabling institutional buyers to digitally access and retire carbon credits from project developers. The system utilized private ledger blockchain technology to record, transfer, and settle these assets, with the bank acting as the designated custodian. This development represented a strategic move to apply traditional asset servicing standards to the nascent and complex voluntary carbon market.
• In August 2024, State Street announced a strategic collaboration with Taurus, a Swiss digital asset infrastructure provider, to enhance its digital custody and tokenization capabilities. Through this agreement, the financial services giant aimed to leverage Taurus’s integrated platform to automate the issuance and servicing of digital assets, including digital securities and fund management vehicles. The partnership was established to address the increasing institutional demand for reliable digital asset services by combining the bank’s traditional custody strength with advanced blockchain connectivity. This initiative underscored the company’s commitment to building a comprehensive operating model for the digital investment lifecycle.
• In August 2024, Citi was selected by the Taiwan Depository & Clearing Corporation to provide global custody services for a new centralized platform. This mandate required the bank to support the infrastructure that enables local brokers to hold overseas investments on behalf of Taiwanese investors. The collaboration aimed to improve asset safety and operational efficiency within the local financial market, leveraging the bank’s extensive global network and proprietary sub-custody capabilities. This development highlighted the critical role of global custodians in supporting financial market infrastructures and facilitating cross-border investment flows in the Asia-Pacific region.

Key Market Players

• 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.

By Type	By Service	By Region
Equity Fixed Income Alternative Assets Others	Core Custody Services Ancillary Services Core Depository Services Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Custody Service Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• 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
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE