Risk in all its forms – be it liquidity, counterparty, credit, currency, issuer, reputational or operational – has been brought into sharp and painful focus by the financial crisis. As a result, everyone from buyside and sellside firms to investors and regulators have become increasingly concerned about risk exposure and how to manage it better. And for the custodians, fund administrators and technology companies that service them, it is presenting not only greater pressures and burdens but opportunities too.

The largest day-to-day risk in the securities services business is operational risk, for example from a wrong calculation of net asset value or a mistake in a corporate action instruction. All firms are putting more resources into automation to mitigate against this kind of risk.