How SLB turns custodian services into profit

December 4, 2025

Custody services have long been associated with safekeeping, but the scale of global Assets under Custody (AuC) has changed expectations. With more than $100tn held worldwide, institutional investors are increasingly asking whether those significant holdings are truly working for them.

IntellectAI, a provider of wealth and capital markets solutions, recently delved into how custody assets can earn more.

Custodian banks remain central to global asset servicing, performing a vital fiduciary role for pension funds, insurers and asset managers. Their traditional remit includes securely holding securities, settling trades, managing income collection and corporate actions, and ensuring compliance across multiple jurisdictions. In recent years, however, technology has accelerated a shift in how these assets are managed, pushing custodians to move beyond protection and offer revenue-generating services, it said.

One area seeing rapid growth is Securities Lending & Borrowing (SLB). Rather than allowing high-quality assets to remain idle, custodians can lend securities to market participants and generate fee income. The global securities lending market generated around $9.64bn for lenders in 2024, and an estimated $35tn of custody assets are already enrolled in lending programmes, IntellectAI stated. The appeal is primarily financial, with long-term holders earning a low-risk income stream while keeping their underlying assets.

To enable this at scale, modern SLB programmes rely heavily on automation and intelligent collateral management. Intellect’s eMACH.ai Custody platform is designed to support custodians in delivering SLB services efficiently, removing manual processes and reducing operational risk. Its capabilities include real-time collateral valuation, automated counterparty risk scoring and straight-through processing for trade execution, settlement and reporting.

A typical SLB transaction involves three stakeholders. A lender, such as a pension fund, gives permission for a custodian to lend its securities. A borrower, often a hedge fund or market maker, pays a fee to borrow assets for trading or settlement needs. The custodian facilitates this exchange, ensuring collateral is properly held and regulatory requirements are met. Platforms like eMACH.ai automate these steps, turning what has traditionally been a resource-intensive activity into a streamlined service.

Smart use of custody assets can transform idle holdings into value-generating positions. As digital platforms continue to evolve, opportunities exist for custodians to expand, scale and commercialise SLB services.

For more insights, read the story here.