Northern Trust’s Ambitious Step into Digital Assets
Northern Trust Corp., a heavyweight in global asset management with nearly $1 trillion in assets under management, is set to dive into the world of digital assets. This Chicago-based firm is taking a bold leap by planning to establish a digital asset custody service. Their strategy? To revolutionize the custodial landscape by implementing lower fees for their services, which could shake up the current pricing structure.
Why the Shift Towards Lower Fees?
Speaking to Bloomberg, Pete Cherecwich, the company’s head of corporate and institutional business, expressed his thoughts on the current custodial model:
“The fees right now the custodians are charging are pretty high… ultimately, I believe unsustainable, because it needs to be an efficient model.”
With traditional custodians charging hefty fees, Northern Trust is aiming to strike a more sustainable balance that benefits both the firm and its clients.
Existing Services and Future Plans
Currently, Northern Trust provides accounting services to various funds engaged in investing part of their holdings in crypto futures. However, customers will have to wait at least another year before its new digital asset custody product hits the market. This delay is likely intentional, allowing the firm to *carefully* construct a service that positions them as a formidable player in the digital asset arena.
Innovative Partnerships Driving Change
This spring, Northern Trust made headlines when it partnered with PwC to introduce a blockchain-powered product designed to streamline audits of private equity lifecycle events. This new technology aims to provide audit firms with a ‘golden copy’ of transaction events, enhancing transparency and efficiency in auditing practices. It’s clear that Northern Trust is committed to integrating cutting-edge technology into its offerings.
The Competition Heats Up
While Northern Trust is gearing up for its entry, it will find itself in a competitive market. Just recently, Coinbase announced its launch of a digital assets custodian for institutional investors. Their service is backed by an independent broker-dealer compliant with SEC and FINRA regulations, already securing $20 billion in crypto assets from clients over six years. It raises the stakes for Northern Trust, which must innovate and execute promptly to claim its share of this burgeoning market.
The Bottom Line
With growing interest in digital assets and an increasingly diverse range of custodial solutions, Northern Trust’s plans could herald a significant shift in the market. As they work to launch their digital asset custody service within the next 12 months, all eyes will be on how they refine their business model and differentiate it from established competitors like Coinbase.
+ There are no comments
Add yours