The huge pressure on custodian banks created by low interest rates and rising liquidity risks is forcing them to try and adapt to survive, not least in the face of fierce competition from fintech firms on the few life lines left, according to analysts from Oliver Wyman and Morgan Stanley.

Custodians hold customer securities in trust for trading firms but have seen their business models eroded by economic and regulatory change in recent years, the analysts warned in a new report published on March 13.