The financial service industry hosts some of the most sophisticated institutions worldwide. However, in an industry where data drives decisions, even the top custodians still wrestle with issues of complete, clean, and consistent custodial data. Yes, this might sound surprising, but even in 2025, the billion-dollar entities trusted with safeguarding financial assets feel the pinch of scattered information!
So why does this data remain elusive? The answer is shrouded in the complex legacy system, lack of standardization, and fragmented formats. This is the custodial conundrum, which impacts reporting accuracy, compliance, decision-making, and, most importantly, client satisfaction.
Custodial data is the positional and transactional data of assets that custodians maintain on behalf of their clients. This data includes asset classifications, account balances, transaction history, pricing, and other relevant metadata. Financial advisors use these key inputs to manage risks, provide precise reporting, and deliver comprehensive insight into wealth.
However, while custodians provide excellent support in safeguarding assets, most aren’t that excellent in making data usable across platforms or ecosystems. They very commonly provide segmented and raw information that leaves the reporting firms or platforms and wealth managers to map, clean, align, and verify it, which leads to the conundrum!
It is a basic understanding that a global or top-tier custodian ensures standardized and clean data, but the fact is, every other custodian reports them differently. In other words, no two firms report the same way. From file formats and value architecture to terminologies and delivery schedules, each institution has its outline and pattern.
The following are a few common factors that affect data integrity, posing a challenge for even the top-tier custodians:
As mentioned earlier, custodial data formats aren’t universal and vary across firms. While some use ISO 20022 standards or SWIFT messages, other custodians still rely on PDF file formats, CSV, or Excel. Furthermore, even if the format matches, the interpretation of the field might not align. For instance, one custodian will define a ‘type of security’ differently from another, leading to differences in asset classification.
Many custodians still rely on traditional and age-old technology stacks that weren’t built with integration or data portability features. Therefore, these legacy systems aren’t just slow but lead to inconsistent and error-prone value extraction.
Custodians commonly present position-level data that misses the crucial aspects of transactional context like tax lots, cost basis, and corporate action impacts. At many instances (especially while dealing with international holdings), the records are received only after hours or even days, making daily and real-time reporting a challenge.
Surprisingly, several custodians still extract or process data with human involvement! This increases the potential for error, especially while processing alternatives or private equity and reconciling complex portfolios.
Whether internal modernization efforts or regulatory requirements, data models are constantly evolving, and custodians strive to keep up with them. While it is fruitful in the long term, it can lead to temporary mismatches or breaks in custodial variable feeds that have to be manually rectified by downstream platforms.
Let’s understand this with an example, consider custodians as freight carriers—responsible for safe transportation of your goods (in this context, data). However, their job doesn’t always include handling the final product or delivery to your door. Similarly, the last mile for raw custodial data, where it gets broken down into actionable insights, is left for family offices, advisory firms, and technology vendors. This last mile is the most critical slice of the information pipeline. This complex part requires:
Most firms lack bandwidth, in-house expertise, or even tools to handle all of these efficiently, and this is where our platform PCR comes in!
At PCR, we are on a mission to overcome the custodial conundrum—addressing the last-mile challenges and working backward. We understand that clean and complete custodial data is a strategic need for firms that flourish on transparency, trust, and better insights into their clients.
Here’s how we strive to make that happen:
1. Deep custodian integrations: Our work doesn’t stop with receiving files from the custodians; rather, we build deeper relationships with each of them to thrive in the long term. PCR’s platform integrates and understands specific nuances of hundreds of custodial data sources, empowering us to map, translate, and standardize the most complex feeds.
2. Data enrichment and normalization: Going beyond basic aggregation, we enrich custodial data with tax attributes, security identifiers, and market parameters. Our algorithms ensure all assets (private or public) are accounted for, anomalies are flagged, and discrepancies are settled.
3. Flexible delivery models: We work towards making clean custodial data accessible whenever and wherever required, and not waiting for the piles of spreadsheets to be disintegrated! So, our clients enjoy their daily feeds within their internal systems, a comprehensive end-to-end reporting APIs or dashboard, and timely access in the format they demand.
4. Expert oversight: Technology handles the major intensive operations at PCR; however, we ensure a human expert oversight. Our professionals work directly with custodians, review edge cases, settle corrections, and confirm that no details get overlooked.
5. Focus on security and privacy: PCR prioritizes compliance and data privacy, and that’s why we're trusted by several discerning wealth managers and family offices. Our infrastructure exceeds the security expectations of regulators and financial institutions.
The fintech industry is evolving and getting closer to automation, integration, and transparency. All of this innovation largely depends on data, and with a dearth of reliable custodial data, firms will have to operate without complete information.
PCR doesn’t wait for custodians to resolve the gaps or blind spots in information pipelines. Instead, we take the custodial conundrum by its horns, owning the last mile, and empower our clients by delivering ready-to-use data.
So, if you want your reports to line up, your dashboards to reconcile, or to decrease the time spent gaining clarity on your portfolio, you must talk to PCR today.
Click here to discover how we spin complexity into clarity!