Faster settlement is forcing banks and treasurers to rethink liquidity, payments, and custody.
This article appears in the October issue of Global Finance Magazine.
The transition to compressed settlement cycles was initially framed as an operational hurdle. In reality, it exposed a fundamental flaw: markets trade 24/7, while legacy custody and payment rails remain shackled to traditional banking windows.
As settlement windows shrink, treasurers no longer have the luxury of multi-day batch reconciliations. Prefunding trades require real-time liquidity optimization to prevent settlement fails. “We are at an inflection point,” said Lim Soon Chong, group head of Global Transaction Services at DBS Bank Ltd. “Intermediaries are reassessing their strategies to capture the shift toward an ‘on-demand’ digital economy.”
Since 2021, DBS has operationalized this through blockchain-powered token services, enabling real-time multicurrency liquidity and automated treasury actions. By integrating these services with custody and digital exchange services, DBS provides the infrastructure for a programmable, real-time financial ecosystem.
Operational Vanguard: Citi’s Custody+ and SEP
DBS Bank
Custody transformation is being driven by integrating real-time processing with modular delivery. At the forefront is Citigroup Inc.’s Custody+, a platform designed for an always-on economy.
For Amit Agarwal, head of custody at Citi, the requirement is clear: “To deliver a frictionless, always-on market, cash and securities for fiat and digital assets must settle in real time, 24/7, supported by custody infrastructure that is equally always on.” This vision is operationalized through Citi’s patented Single Event Processing (SEP) technology. Agarwal noted that SEP’s value extends beyond efficiency. By compressing timelines for income events, corporate actions and tax processing, SEP provides clients with earlier liquidity. This transforms faster settlement from a back-office metric into a strategic advantage.
Chris Cox, head of investor services at Citi, added that clients are modernizing legacy models to address cost and regulatory pressures. Cox said the Custody+ ecosystem is the direct answer to these needs. “Customers fundamentally want simplification and improved outcomes,” Cox explained. “Custody+ is our response to addressing those needs—it’s about creating front-office benefits rather than just letting custody be about post-trade. We chose to disrupt our own custody model and bring together our suite of near- and real-time capabilities as a modular ecosystem.”
Yet, technological speed alone is insufficient. Anthony Yeung, chief commercial officer at CoinCover, argues that institutional confidence requires secure key management and transparent recovery. “The regulatory architecture must be matched by institutional-grade safeguards,” Yeung explained. “The real measure of success is whether the ecosystem is built with resilience and operational integrity at its core.”
While Citi’s modular approach serves as a blueprint, this evolution is triggering a cascading effect across the landscape. The move to 24/7 markets is being actively operationalized by major players stripping away the obsolescence of batch-driven infrastructure, fueled by the rise of 24/7 trading, the need for instantaneous collateral fluidity and the proliferation of tokenized real-world assets.
Industrywide Architectural Shifts
Global custodians are redefining the infrastructure layer through digital adoption. BNY has pioneered a unified omnibus architecture that integrates legacy and digital instruments within a single compliance framework. By using distributed ledger technology, BNY enables microsettlements and real-time collateral movement, bypassing standard clearing hours.
Similarly, J.P. Morgan’s Kinexys platform leverages its institutional blockchain arm for intraday liquidity and near-instant delivery-versus-payment, allowing managers to pledge tokenized money market shares as collateral during weekends, neutralizing settlement drag. State Street Bank and Trust Company is bridging the gap between digital asset solutions and legacy accounting via strategic partnerships, replacing traditional reconciliation feeds with streaming APIs. Specialized players like Sygnum and AMINA, meanwhile, further enable atomic cross-currency settlements and smart-contract-based custody.
Buy-Side Adoption & Operational Impact
The buy side is equally driving the push for modernization. BlackRock’s BUIDL fund, in partnership with BNY and Securitize, Inc., enables continuous yield and peer-to-peer collateral transfers. Franklin Templeton’s Franklin OnChain US Government Money Fund uses public ledgers to enable round-the-clock share creation, while Fidelity Digital Assets supports continuous digital clearing. Additionally, UBS Asset Management is piloting automated fund servicing through Project Guardian. These initiatives signal a shift toward programmable financial services.
The infrastructure of 24/7 custody rests on three pillars. First, tokenized liquidity replaces traditional, time-restricted batch messaging windows with programmable cash legs, allowing instantaneous value movement. Second, automated servicing utilizes smart contracts to manage corporate actions, drastically reducing latency. Third, advanced security orchestration, leveraging multiparty computation and hardware security modules, ensures that high-value movements remain secure and verifiable, even outside banking hours. As custodians dismantle legacy constraints, the focus is shifting toward always-on capabilities. The race is no longer about who settles fastest but who builds the most reliable architecture for a global economy that never sleeps.
Navigating the New Custody Paradigm
Moving from traditional, batch-reliant processes to always-on operations transforms custody into a strategic advantage. It allows automated, round-the-clock value movement, continuous yield opportunities, and real-time liquidity management. However, operating in a 24/7 market shifts focus toward new security and regulatory obligations.
Regulatory requirements from the U.K. Financial Conduct Authority (such as the crypto asset authorization gateway and CRYPTOPRU prudential rules) and U.S. federal stablecoin rulemaking have effectively shifted compliance from a legal filing into an operational and technical security mandate. As a result, custodians and issuers must move away from treating digital asset security as simple smart contract auditing, moving instead toward protecting off-chain infrastructure.
Ultimately, the era of the “siloed vault” is ending. Custody modernization is no longer merely an IT upgrade; it is a fundamental reengineering of the trust model. By embedding institutional-grade wallet infrastructure directly into core banking rails, custodians are shifting from passive gatekeepers to active enablers of the 24/7 digital economy. This evolution is the critical foundation for the next decade of institutional finance, where speed, transparency, and ironclad security are the primary competitive currencies.
Gilly Wright is a contributing writer based in the U.K.