Hong Kong’s custody market is increasingly reshaped by the movement of institutional assets between the Chinese mainland, Hong Kong and global markets. The role of custodian banks is therefore no longer limited to safekeeping, settlement and reporting. Institutional clients also require access to cross-border market infrastructure, fund administration, investment compliance monitoring, foreign exchange, cash management and operational continuity across multiple markets. The custody business of the Industrial and Commercial Bank of China (Asia), or ICBC (Asia), operates within this broader shift. Its platform is linked to China-related capital market infrastructure while also supporting global asset servicing through international sub-custody arrangements. This gives the business a role closer to institutional market intermediation than conventional custody alone. The bank reported strong growth in its custody franchise, with assets under custody expanding significantly during the year, supported by rising institutional demand and increased cross-border investment activity. Transaction volumes and values also recorded substantial growth, reflecting broader adoption of the bank’s custody and related institutional services. Among Chinese custodians in Hong Kong, ICBC (Asia) further strengthened its market position, gaining share and reinforcing its role as a leading provider of custody solutions. The expansion in assets and transaction activity was accompanied by higher profitability, according to the bank. It also used competitive pricing to secure sovereign and institutional mandates while investing in infrastructure and compliance capabilities. These strategic investments and pricing concessions lay a solid foundation for scale growth, paving the way for robust and sustainable returns. Cross-border connectivity, global network and institutional client base ICBC (Asia)’s custody model is built around two layers of connectivity. The first is China-related infrastructure access. As a direct participant in CIPS and one of the first custodians for both northbound and southbound Bond Connect, the bank’s cross-border infrastructure is strengthened further by its role in China Depositary Receipt custody. The arrangements allow the bank to support institutions that need to move through China-linked settlement, investment and payment channels. The second layer is global market coverage. ICBC (Asia) now covers 92 markets through a combination of ICBC Group overseas branches and international sub-custodians. The result is a custody structure that combines China market connectivity with global settlement reach. This structure is reflected in the composition of the custody book. The bank reported that its global custody assets now account for about 60% of total AUC, while Hong Kong assets account for the remaining 40%. Its institutional client base includes sovereign institutions, central banks, insurers, pension institutions, commercial banks, securities firms and asset managers. By the end of 2025, the custody department served about 90 institutional clients and managed more than 3,300 accounts. The growth story is therefore tied to institutional allocation patterns. Chinese mainland-related clients are increasing offshore and global allocations through Hong Kong, while offshore and international clients continue to require access to China-related assets and settlement channels. ICBC (Asia)’s role is to connect these flows through custody, settlement, reporting and compliance infrastructure. Product architecture, service expansion and core systems ICBC (Asia)’s custody platform combines asset safekeeping, settlement, corporate actions, valuation, fund administration, investment supervision, foreign exchange and cash management. The bank’s fund administration capabilities extend across Hong Kong public funds, private funds, open-ended fund companies (OFCs), exchange-traded funds (ETFs), Cayman and British Virgin Islands (BVI) funds and segregated mandates. Since 2020, ICBC (Asia) has conducted a comprehensive review of the self-built Global Investment Settlement System (GISS) and Custody Online Banking, enhancing functionality and reporting capabilities. It has executed over 70 system upgrades—delivering 500+ enhancements at a monthly release cadence—and introduced 40+ customised custody reports. The self-developed platform supports securities safekeeping, settlement, corporate actions, cash payments and securities lending. According to the bank, straight-through processing reached 98.6%, while processing times for critical transactions declined by 70%. It has also introduced an automated payment interface and modules supporting precious-metals custody and securities lending. These enhancements have expanded processing capacity and reduced manual intervention, although the bank did not disclose external benchmarks against other custodians. The service perimeter expanded in 2025 through products addressing currency, liquidity and financing requirements. Automated foreign exchange conversion was introduced in August 2025. Under this function, clients predefine conversion rules, and the system executes foreign exchange (FX) conversions accordingly. This reduces manual processing and supports multi-currency position management. The bank also introduced a credit facility for asset management product, using custody asset portfolios as a basis for credit assessment. This service is designed for structures such as unit trusts, open-ended funds, Cayman funds and partnership funds, which may face constraints when applying for traditional financing. In May 2026, ICBC (Asia) formally launched securities lending custody services, enabling clients to use idle securities as part of portfolio income and liquidity management. The operating model is supported by multiple instruction and data channels. ICBC (Asia) receives instructions through SWIFT, Secure File Transfer Protocol (SFTP), FDEP, internet banking, email and manual fallback processes. Digital transformation, AI and operational scaling efficiency ICBC (Asia)’s digital transformation focuses on key custody processes, including instruction handling, reporting, settlement monitoring and corporate actions. In 2025, the bank enhanced its online securities platforms by optimising instruction queries and export functions, while introducing consolidated portfolio reporting for sovereign clients. AI is most directly applied to fund subscription and redemption processing. The workflow uses intelligent recognition technology to read client documents, after which AI models validate and structure the extracted data. This process effectively converts document-based orders into structured data for seamless downstream processing. The bank also leverages advanced enterprise-level AI models to support its infrastructure. In custody operations, these tools focus on data extraction and transaction verification, significantly reducing the need for manual entry and exception handling while maintaining rigorous checks. Alongside higher transaction volumes, ICBC (Asia) continued to automate key custody processes, including instruction handling, data extraction and transaction verification. Its cost-to-income ratio remained stable in 2025. Risk management, governance and operating resilience ICBC (Asia)’s custody risk framework is organised through governance, pre-trade controls, sub-custodian oversight and business continuity planning. The governance structure follows a three-lines-of-defence model. Business units carry direct responsibility for day-to-day risk management and embed compliance checks into operating processes. Risk management and internal control functions set policies and monitor the bank’s overall risk position. Internal audit provides independent assessment of the risk management framework. Pre-trade control is applied through a real-time interception mechanism. When an instruction is received, the system checks whether the proposed transaction breaches the client’s investment guidelines. If a breach is detected, the system can reject the instruction automatically without any manual intervention. Alerts are then sent to the client and investment manager according to client requirements. The rules can be configured by mandate, allowing new or revised investment restrictions to be added to the review system. Sub-custodian oversight is conducted through scoring, due diligence and escalation. ICBC (Asia) assesses sub-custodians on financial strength, market reputation, compliance, operational risk indicators such as settlement errors and service capability. Due diligence may be conducted remotely or on site. If a sub-custodian’s score falls below an internal threshold, or if a material risk issue arises, the bank may begin a termination assessment. Counterparty controls are based on approved counterparty lists submitted by clients. Where a proposed counterparty is not on the list, the bank confirms the details with the client and updates the records before proceeding. This creates a control process around both the custody chain and the counterparties involved in client transactions. Business continuity is set through explicit recovery targets. For ultra-time-sensitive activities, the recovery time objective is 30 minutes. For standard critical activities, the recovery time objective is four hours. The recovery point objective for critical business data is no more than 30 minutes, meaning restored systems should not lose data beyond that period before the disruption. These targets are assessed through drills covering staff, technology, premises and suppliers, so that the recovery process is assessed across the operating chain rather than only at the system level. From custody provider to institutional asset servicing platform ICBC (Asia)’s custody business reflects a wider shift in the industry, from post-trade administration towards institutional asset servicing infrastructure. What distinguishes its 2025 trajectory is not scale alone, but how growth, product expansion and automation moved in tandem, each reinforcing the bank’s role as an intermediary between the Chinese mainland and global capital flows. The next phase will depend on how far a conventional custody platform can extend into digital and tokenised asset structures. ICBC (Asia)’s approach remains gradual and compliance-led. Fund tokenisation is still an area of exploration rather than a standalone business line, while its core strengths remain concentrated in regulated custody, fund administration, cross-border settlement and institutional risk control. Its franchise is therefore best understood as a Hong Kong-based institutional asset servicing platform anchored in China connectivity, global reach and self-developed systems. Its differentiation lies in combining China market access and global coverage with integrated operating processes, automation and institutional risk controls. Contact details: ICBC (Asia) https://www.icbcasia.com/
