Depositary operations are expanding on every front while the tools underneath them stay much the same. This is the pressure depositaries are under, and the platform Depowise built specifically to take it on.
Depositaries hold a key role in European fund markets, and that role exists to protect investors. They are the independent party standing between a fund’s manager and the people whose money is invested in it, responsible for safeguarding the fund’s assets, confirming that its cash is where it should be, and verifying that it is being run in line with the rules it has published. Investor protection in European funds is not a principle held in the abstract. It is a set of duties, and those duties sit with the depositary.
The pressure on the depositary function
Every UCITS and every alternative investment fund in Europe must appoint a depositary. The depositary is the independent party responsible for monitoring the fund’s cash, safekeeping its assets, and overseeing that the fund is run in line with its own rules and the regulations that apply to it. It is one of the most consequential roles in the fund industry, and when it fails, investors are exposed to risk and the depositary carries the liability.
The work has always been demanding. What has changed is that it is now expanding in two directions at the same time. There are more funds to oversee, as European fund assets have grown to record levels, and there is more to do for each of them, as regulation and the assets themselves become more complex. The growth in the market is concentrated in alternatives, in private credit, private equity, and real assets, which cannot simply be held in custody and reconciled against a statement. They demand ownership verification, look-through into layered structures, and continuous monitoring of flows that follow no fixed calendar.
The uncomfortable reality is that most depositaries still run this work across spreadsheets, manual reconciliation, and a set of disconnected tools held together by the knowledge of a few experienced people. This is not a failing of the people involved who are highly skilled and get the work done. It is a structural limitation of the operating model.
In a manual model, the cost of the function grows in direct proportion to the assets under oversight. More funds mean more reconciliations, more exceptions to chase, more checks to perform, and eventually more people to hire. For a depositary bank, the exposure runs deeper than a headcount. Manual processes generate errors, and errors carry operational risk capital. Knowledge concentrated in a handful of individuals is a single point of failure. And an operating model that cannot produce evidence on demand becomes a regulatory risk the moment a supervisor asks not what was checked, but how the depositary knows it was done correctly.
Regulation is raising the bar, not just the workload
Alongside the growth in volume and complexity, the regulatory framework around the depositary function is tightening, and it is doing so in a way that adds to the burden rather than easing it.
AIFMD II, with a transposition deadline of 16 April 2026, extends depositary responsibilities around the oversight of delegation, the treatment of loan-originating funds, and the depth of information a depositary must be able to obtain and evidence. The revised Central Bank of Ireland UCITS Regulations, published on 10 July 2026, introduce new approval and verification duties for depositaries, including a formal role in areas such as redemption-in-specie and performance-fee verification. DORA, in force since January 2025, sets explicit standards for the operational resilience of the systems that depositary work depends on, together with obligations around incident reporting and oversight of third-party technology providers.
The common thread is a rising standard of evidence. It is no longer enough to have performed a control. A depositary is increasingly expected to demonstrate that the control took place, that its result was correct, and that its output was reviewed and understood. Supervisors have made clear that recording an oversight activity is not the same as showing it was effective. A model built on manual work and personal recollection struggles to meet that standard consistently, and it struggles most precisely when volumes are highest.
What Depowise does
Depowise is the operating platform depositaries use to run their core duties. It is not an adjacent tool or a general-purpose fund-administration system with a depositary feature attached. It is a platform built for the depositary function, and only the depositary function, since 2021, by a team that has done the work rather than only sold the software.
The design principle underneath the platform is that the depositary’s duties are not separate problems to be solved with separate tools. They run on one shared platform layer, drawing on the same centralised data, the same structured workflows, the same automation, and the same audit trail. Recent industry research on Luxembourg depositaries found that the average number of systems in use has been rising rather than falling, and that oversight in particular remains heavily manual. Solving each duty in isolation has left the function more fragmented, not less. Depowise takes the opposite approach and brings the three core duties into a single environment.
Cash Flow Monitoring
A depositary must monitor all of a fund’s cash flows, ensuring money is held in the correct accounts, moves for legitimate reasons, and reconciles to the fund’s activity. Identifying which flows require attention, and evidencing that judgment, is where the operational effort concentrates.
Depowise approaches this in a deliberately conservative way. The platform treats every cash flow as significant by default, then reduces the volume through automated classification, clearing routine and explained flows systematically and surfacing only the genuine exceptions as a manageable daily queue. Starting from the widest possible position and narrowing it through automation means nothing is filtered out before it has been assessed. Every flow is still monitored, and the reasoning behind each classification is captured. There is simply no longer the need to review one line at a time.
Safekeeping and Recordkeeping
For assets that can be held in custody, the depositary keeps accurate, reconciled records against the custody chain. For assets that cannot, it must independently verify that the fund owns what it claims to own and maintain a defensible record of that verification. Depowise holds an accurate, auditable record of every asset across every fund and every structure and treats ownership verification as a continuous process supported by independent circularisation from source. Custody and non-custody assets sit in the same records under the same controls, giving the depositary one consolidated view of what each fund holds rather than a reconciled statement for the simple assets and a spreadsheet for the difficult ones.
Oversight
The oversight duties are the broadest and most exposed to judgment. They cover NAV oversight, investment compliance and limits monitoring, transfer-agent and investor oversight, timely settlement, and income distribution, in short, confirming that the fund is being run the way its documentation says it will be. Depowise systematises these controls and captures the evidence as the work is done, so each control produces its own traceable record, and the audit trail is a by-product of the process rather than something reconstructed afterwards. The judgment remains with the depositary. What changes is that the judgment is supported by a complete and reviewable account of how each conclusion was reached.
The same shared foundation is what allows the platform to extend without fragmenting. Capabilities beyond the three core duties, such as fee calculation, due-diligence questionnaires, a client portal, company secretary, fund onboarding and reporting, are built on the same data layer and the same controls. Adding one extends what the platform already does, rather than introducing another disconnected system to reconcile later.
On AI, and where this is heading
There is no shortage of AI narratives in financial services, and Depowise takes a deliberately narrow view of the subject. Automation and AI are applied where they genuinely reduce the operational burden of depositary work, and not where they simply make a compelling headline.
In a control function with legal accountability, the decisions that carry that accountability cannot be handed to a model, and we do not pretend otherwise. Depowise is built with a qualified professional in the loop by design. The platform prepares, classifies, reconciles and surfaces what needs attention, and a person makes the decisions that carry weight. Every automated step is explainable and auditable, because an answer a depositary cannot explain is not an answer it can stand behind.
Data governance is the other half of this. Depositaries operate under their own model risk and data governance frameworks, and any AI capability they rely on has to sit inside those frameworks rather than beside them. Alongside the AI we build into the platform, we are developing and assessing the ability to connect to a depositary’s own AI systems through MCP connectors and APIs, so that the intelligence applied to their data operates under their governance, their controls, and their model oversight. For institutions with established internal AI capability, this matters as much as the functionality itself.
The direction of travel is clear. Depositary work will not become simpler. Fund assets will keep growing; alternatives will keep taking a larger share, and the standard of evidence will keep rising. Automation will progressively take on more of the execution, moving from assisting the professional to handling defined tasks under supervision, while the judgment and accountability that define the role stay firmly with people. The institutions that treat depositary operations as something to be engineered rather than simply staffed will be the ones able to grow into that future rather than being constrained by it.
Who this is built for
Depowise is built for the institutions that carry depositary responsibility in Europe: depositary banks, specialist and professional depositaries, management companies and AIFMs with oversight obligations, and the fund administrators who support them. Across Luxembourg, Ireland and the wider European market, these are the organisations that must be able to answer for every fund on their books, on demand, to a standard that keeps rising.
The platform supports depositaries overseeing more than €2 trillion in assets across 3000 funds, spanning UCITS and alternative strategies, with zero client churn. These are tier-one institutions with large and complex fund books, precisely the environments in which a manual operating model reaches its limits first.
The depositary function exists to give investors and regulators an independent, evidenced answer about how a fund is being run. Our purpose is not to replace the judgment that gives that role its value, but to make sure it can still be exercised, and proven, for every fund, at any scale.
Depowise builds technology for depositaries. The Depowise platform brings Cash Flow Monitoring, Safekeeping, and Oversight into a single operating environment, helping institutions run their core depositary duties with greater consistency, control, and efficiency in complex, regulated fund markets. Founded in 2021, Depowise serves depositaries across Europe managing over €2 trillion in assets across 3000 funds.
