The ETF industry has never looked stronger. Across every conference presentation, research report and LinkedIn post, the same charts continue to dominate: assets under management rising, transaction volumes increasing, new issuers entering the market and product innovation accelerating at pace.
Growth, however, is only one side of the story.
That was the central theme of my session, “Rewiring ETF servicing and distribution: How technology is raising the standard for ETFs”, at ETF Ecosystem Unwrapped 2026 in London, where discussions across both days repeatedly returned to a critical question facing the industry: can the infrastructure supporting ETFs keep pace with the market’s expansion?
From panels on retail adoption and market structure to sessions on T+1, ETF execution and servicing innovation, the message from speakers throughout the conference was remarkably consistent. Europe’s ETF ecosystem is entering a new phase of maturity, but operational complexity is rising alongside it. The challenge now is ensuring the technology underpinning the industry is fit not only for today’s growth, but for what comes next.
Growth is good. Growing can be painful.
The ETF market’s trajectory remains extraordinary. Demand continues to rise across retail and institutional channels, while issuers are launching increasingly sophisticated products spanning active, thematic, derivative-based and alternative exposures.
But operationally, growth creates strain.
During my session, I explored how many of the systems supporting ETF servicing today were never designed for the scale, speed and complexity the market now demands. In conversations with issuers, asset servicers and market participants, several themes emerge repeatedly: fragmented infrastructure, inconsistent regional processes, manual workflows and growing operational risk.
As ETFs expand globally, firms are also contending with increasingly diverse market structures. A workflow that operates efficiently in Europe may require entirely different processes in Asia. Settlement models, local market practices and operational nuances vary significantly between jurisdictions, creating additional complexity for issuers and service providers trying to scale internationally.
This fragmentation was a recurring theme throughout ETF Ecosystem Unwrapped. Sessions on Europe’s fragmented ETF market, ETF execution and retail adoption all highlighted how operational inconsistency continues to slow efficiency and innovation across the ecosystem.
As I discussed during the presentation, many firms are still managing ETF operations through a patchwork of transfer agency systems, fund accounting platforms, portals and spreadsheets. Every additional market, product type or distribution channel introduces more manual intervention, more reconciliation and more risk.
At a time when investors increasingly expect real-time experiences, much of the operational infrastructure behind ETFs still relies on processes built decades ago.
The pressure for faster, cheaper and better
One of the strongest messages emerging from the conference was that fee pressure is no longer confined to traditional passive strategies. As the ETF industry evolves, issuers and service providers alike are being asked to deliver operations that are faster, cheaper and more scalable.
That pressure fundamentally changes the technology conversation.
A key point I highlighted during the session was that many ETF operational models evolved organically, often through in-house systems and regional workarounds. That may have been sustainable when volumes were relatively modest. It becomes far more difficult when firms are processing significantly larger order flows across multiple regions and asset classes.
At Calastone, we increasingly see issuers and service providers looking for technology that can consolidate fragmented workflows into a single operational environment. The objective is not simply automation for automation’s sake, but the creation of scalable operating models capable of supporting the next decade of ETF growth.
Real-time processing is becoming particularly important.
During the discussion, I also touched on the growing operational demands created by cash creation and redemption models. As more issuers adopt these structures, authorised participants and market makers need greater transparency into the lifecycle of primary market orders. Waiting until late on T+1 for operational visibility is increasingly incompatible with modern trading and hedging requirements.
This was also reflected in broader conference discussions around T+1 readiness and ETF execution, where multiple speakers highlighted the need for operational infrastructures that can support faster settlement cycles and near real-time data flows.
The ETF market itself operates in real time. Increasingly, its servicing infrastructure must do the same.
Scaling distribution for the next phase of ETF growth
Another major theme across the conference was retail participation and distribution.
Panels discussing retail adoption, platform evolution and ETF accessibility highlighted how demand for ETFs is growing well beyond institutional channels. Yet in many markets, traditional wealth platforms were not originally designed to support exchange-traded products efficiently.
This creates an important challenge for the industry: how do we make ETFs more accessible without introducing additional operational friction or forcing firms to reinvent their operating models?
During my session, I explored how better connectivity between platforms, custodians, brokers and market infrastructure providers could help solve that problem. By integrating ETF trading more effectively into existing wealth and mutual fund distribution ecosystems, firms can simplify access for retail investors while improving operational efficiency.
At Calastone, this is an area where we see significant opportunity. Our network already connects thousands of wealth platforms and fund distributors globally. Increasingly, those firms want access to ETFs alongside traditional mutual funds and money market products.
That demand is also driving interest in innovations such as fractional ETF ownership, unlisted ETF share classes and new digital distribution models. Increasingly, asset managers are viewing ETF share classes not simply as a product innovation, but as a distribution strategy, extending existing fund capabilities into ETF channels without rebuilding the entire operating model from scratch.
Across Europe and Asia, issuers are exploring how ETFs can be adapted for broader retail participation without compromising the benefits of the ETF wrapper itself.
Importantly, distribution innovation is no longer just about traditional channels. As ETFs continue to scale, the industry’s focus is increasingly shifting from product innovation toward access innovation, making ETFs easier to use, distribute and integrate into existing investment workflows.
Tokenisation and the future of ETF distribution
Tokenisation was another topic that surfaced repeatedly throughout the conference, although often with very different interpretations.
As I discussed during the presentation, for us tokenisation is fundamentally a distribution story.
The opportunity is not simply about digitalising existing processes or creating blockchain-native assets. It is about enabling investment products, including ETFs, to reach new investor demographics through digital channels and wallet-based ecosystems.
In regions where digital asset adoption is accelerating rapidly, investors increasingly expect financial products to integrate seamlessly into digital platforms. That creates a powerful opportunity for asset managers to distribute ETFs in new ways.
During the session, I highlighted how we are already seeing growing interest in tokenised unlisted ETF share classes and blockchain-enabled distribution models. In practical terms, this allows firms to use existing fund structures while making them accessible through digital environments that appeal to a new generation of investors.
Tokenisation may ultimately become the next wrapper through which investment products are distributed to digitally native investors.
This concept of “ETF 3.0” or “Fund 3.0” remains in its early stages, but the direction of travel is becoming clearer.
The industry is moving toward more digital, more connected and more flexible operating models.
Preparing for the day after tomorrow
One of the anecdotes I shared during the session came from a leadership offsite at a global bank. Executives were asked how much time and investment they dedicated to “today”, “tomorrow” and “the day after tomorrow”.
Most of the focus, unsurprisingly, was on today’s operational challenges. Very little attention was being given to the longer-term future.
The ETF industry risks falling into the same trap.
As I argued during the presentation, if firms remain consumed by legacy operational complexity and technical debt, they may struggle to prepare for the structural changes already beginning to reshape the market. Whether that is tokenisation, digital distribution, AI-enabled workflows or entirely new investment structures, the pace of change is unlikely to slow.
The ETF ecosystem has been built on innovation. Maintaining that momentum will require infrastructure that is scalable, flexible and globally connected.
Because if the industry is not thinking about technology as a strategic challenge today, it may not be ready for tomorrow – or the day after tomorrow.
