Custodians battle pandemic, geopolitics, market volatility

How has DBS managed amid the pandemic and other recent global events?

At DBS, even before the pandemic, a lot of our applications were already on cloud. So, our embedded digital workflow, tools and processes were a clear advantage for us during lockdowns. This allowed our employees to seamlessly transition from office to home, and client information to remain secure. With many clients also working from home, new procedures were quickly put in place to onboard them onto our secured and interactive online platforms as they develop their own digital strategies. Now, almost 100% of our non-Swift clients are on our digital platforms. As DBS has been on the digital journey for several years, Covid and other events have simply allowed us to accelerate the process and boost client convenience.

We’ve also been engaging with our clients closely on global events like the Russia-Ukraine war and other ongoing geopolitical unrest, and sharing the impact such events may have on them. Understanding their needs has allowed us to provide solutions expeditiously.

How has the pandemic revamped BCP arrangements?

Business Continuity Planning (BCP) is the process of creating prevention and recovery systems to deal with potential threats and ensure that an institution is able to quickly resume its functions following a disruption. 

The pandemic brought about a real-world stress test of many pre-Covid assumptions and protocols. It allowed us to address new scenarios and refine our assumptions – such as extending our BCP timeframe from a few hours to a few days, to a few hours to more than six months – prompting us to redefine what roles and processes are considered critical. Clients, too, have had to cope with the switch to prolonged contingency mode, and DBS was there to adjust to the new environment. For example, straightforward contact-free financial and payment solutions like DBS DigiDocs and DBS Digi-Onboarding have shifted from being convenient to being imperative.

Are enquiries growing on engaging custodians from a neutral jurisdiction?

There is an increased focus on how one builds operational resiliency and agility amid these ongoing geopolitical situations. Our clients have shared that it is increasingly important for them to diversify counterparty risks. One of the ways of mitigating this is by diversifying their portfolio to service providers in more neutral and sound jurisdictions.

What are the biggest challenges in the coming years?

Some of the biggest challenges for our clients are how best to achieve operational efficiency, reduce counterparty risk, harmonize data, and continue to accelerate the search for yield and alpha as new asset classes emerge while managing profitability. 

We believe DBS is well-placed to help our clients orchestrate solutions and streamline information across operational processes for more value-added insights through data. DBS is also the only bank-backed custodian in Asia that supports five different asset classes – equities, fixed income, funds, cryptocurrencies and security tokens – highlighting the strength of our digital asset ecosystem in facilitating new ways of unlocking value for issuers and investors.

Published by Asset Publishing and Research Limited