More banks are adding the option of crypto custody in their service offering in a move to open up to new customers and create a new revenue stream.

Crypto custody, according to CoinDesk is when third-party looks after a user’s crypto for safekeeping similar to a physical bank having a safe deposit box.
According to a new Gartner report, 3 Options for Banks and Investment Firms to Offer Crypto Custody Capabilities, the authors say banks will either see crypto custody as an extension of its value proposition or as a catalyst for justifying its involvement with a wider portfolio of digital assets.
The report noted that CIOs can lead their enterprises in the analysis needed to take action and support a new revenue stream.
According to the authors of the report, Ali Merji, Ralf Herrmann, Christophe Uzureau banks and investment firms can build crypto custody capabilities that will enable them to offer innovations in investment vehicles and transaction services that customers expect in three ways.
This can be done by building their own crypto custody services platform, acquire a crypto custody technology or service provider and outsource to a subcustody service partner, for example, crypto exchanges as a white-labelled service provider.
The Garter report notes that banks are mostly looking for core crypto custody capabilities such as security services and the safekeeping of public keys.
While banks are ruminating on whether or not to consider more crypto options for its customers in the coming years, only a few have implemented these services.
The 2021 Gartner Voice of Financial Decision Maker Survey found 10 percent of corporations that banks service have already deployed crypto-related payment capabilities, 20 percent will be deployed within 12 months, and 16 percent will deploy in five years.
The report urges bank and investment CIOs to consider the rapid evolution of this capability, especially the security and regulation side.
The authors said, “Their ability to keep up with the pace of change internally will be a key factor. Integration capabilities and process orchestration capabilities will be critical differentiators.
“CIOs must understand their firms’ strategy for this new market and decide the right technical custody solutions and operating/sourcing model to align to the financial outcomes that their firm is targeting.”