Redefining Asset Servicing in the Digital Age

Ee Fong Soh, Group Head Financial Institutions, Securities & Fiduciary Services, Global Transaction Services at DBS, shares about the journey that transformed a traditional financial institution into a leading digital asset service provider. 
 

The Asset: Which emerging technologies, such as AI, cloud, or API, are having the most tangible impact on asset servicing in Asia-Pacific today?
 

Ee Fong Soh: Our digital transformation has been ongoing for a long time. It’s now 2025, so it’s been 11 years. That transformation didn’t happen overnight. It was really rigorous, step-by-step, with everyone involved. Initially, we looked at operational efficiency. How do we leverage cloud technology, recognising that it gives us the ability to deliver services faster, maybe at a lower cost? But it is new tech that regulators understandably have certain concerns about. And so, how do we ring-fence the embrace of this technology and, at the same time, ensure that we are in a safe environment for clients?

Then came blockchain. I remember when we ideated this in 2017 to 2018, we thought we needed to embrace asset servicing for cryptocurrencies. Why? Because we recognise that we are an Asian bank, and with this whole mandate of servicing Asian wealth, we were starting to see people investing into cryptocurrencies. This gave us an opportunity to tap into an asset class where it is truly global.

Then, post-crypto winter, we started to see institutional clients coming into play. So, there were opportunities right there to look at cloud computing and blockchain. I remember we also launched DBS RAPID, our suite of API (application programming interface) solutions in 2018. APIs improve the interoperability between the clients and us, and embedding that all the way into the client’s ERP (enterprise resource planning).

In the custody world, we ask ourselves, where can we leverage new tech to help us better serve our clients? One is, of course, the ability to safekeep new asset classes like cryptocurrencies. It is a very unique setup.

In the last few years, we have also leveraged GenAI (generative AI) to be like a copilot. When clients call in, the copilot could do a transcript of the conversation so that we can keep the conversation, capture it, document the calls, and on top of that, we are able to analyse the calls for patterns.

To come back to your question, these are the emerging technologies, whether it is AI, DLT, cloud or API, that make a tangible impact on asset servicing today.
 

What are the operational challenges in servicing tokenised assets, especially in a hybrid environment where traditional and digital coexist?
 

One is the integration of digital assets into traditional systems. It still remains a challenge because in some of the traditional systems, securities are typically recorded in ISIN or local code. Cryptocurrencies and digital assets are not necessarily recorded in the same manner. In a blockchain and in digital assets, you settle practically instantaneously. Whereas in a traditional system, you go to the exchange, you have a T+2, and so you settle it two days later. Whereas blockchain is settling instantaneously, 24/7, even on a Saturday or Sunday. So, between the traditional fiat system and the crypto asset system, there is a disparity.

Which is why there are many banks that are now looking at whether there is an opportunity to leverage stablecoins to facilitate the recording of the movement.

We want tokenised assets to move freely, whether it is crypto-currencies or tokenised real-world assets, between different wallets, different exchanges, and different blockchains. But today it’s not easy.

In the traditional world, you always have certainty of payment, certainty of receipt of the asset. There is finality in the transaction. In the new world, there is that, but you will need to create different steps to get there.
 

Do you see growing institutional appetite in APAC for tokenised funds or securities?
 

Yes, we see growing institutional appetite for tokenised funds. These funds could be private assets or money market funds. Securities, not quite yet, because, at the end of the day, many of these ecosystems are quite standalone. Unless you have the network density of distribution, it is not going to be the same as an exchange in the traditional world, where they are able to attract a lot of investors.

Regulations have also helped us to have clarity on what the framework is, and to have clarity on what the rules and investor protection need to be in place. Like in Hong Kong, they have approved the first tokenised retail fund. Singapore’s MAS and Japan’s FSA are also drafting their own frameworks. So, we will have clarity, and with that clarity, I would expect that the asset management community would jump onto the bandwagon to create.
 

How is digitalisation improving the client experience in asset servicing, from onboarding to reporting and analytics?
 

For us, what is important is that it’s not just one channel where the client can communicate with us, where we give the client access to that data. It’s the ability to provide multiple channels. Whether it’s through Swift, online access, or host-to-host APIs, we are doing that.

One of the things we’re working on in the digital asset world is how to provide settlement instructions and settlement finality to the market makers through the API.

If you look at the traditional world, what I’ve always struggled with is, why do you need API? Because API should give you instant notification. From a cash perspective, you want instant notification. But from a securities perspective, it’s T+1 or T+2 on a batch basis. You’re not going to get anything instant. But in the digital asset world, once the exchange of the fiat and the digital asset happens, our clients also want to know whether it has taken place. So, we have launched an API for settlement for that purpose. Because there’s no point in launching an API when the settlement cycle is still T+2 or T+1, you still have one full day.
 

What are the key compliance and data governance considerations in deploying advanced digital services across APAC’s fragmented regulatory landscape?
 

Because each market has its own data sovereignty and privacy laws, we still need to adhere to such requirements. The APAC market is not one market; it is made up of multiple markets. Each market will have its local regulations, and we must understand each market and figure out how to adhere.

We can leverage digital platforms, cloud platforms to enable our in-country market to access the information, but it also means that you need to give it its own space within the cloud so that it complies with the local regulations.

Cyber threats are real, and it is having the ability to leverage the technology and the data points that will hopefully help us stave off some of these cyber challenges. It’s about proactive monitoring of threats, working with regulators, and having industry intelligence that we have to use to address this evolving landscape. Even in scams, it is really about working with the regulator, working with industry partners, to come up with ideas as to how we protect the man on the street.

Source from The Asset