This study would help to understand how artificial intelligence (AI) can benefit custodian banks in investment management and data security. In this work, we explore some of the impacts of AI in important areas such as fraud detection, cyber security or operational efficiency by collecting findings from secondary data associated with peerreviewed work. The research is well known for its empirical analysis surrounding the positive relationship between AI and progress in these areas of statistical methodologies such as regression analysis and correlation. More hypothesis test confirms the fact AI-based solutions has allowed for more sophisticated anti-bank fraud systems and have helped in reducing the costs significantly. The report suggested custodian banks could harness AI to enhance investment portfolio optimisation capabilities and shore up data security infrastructure, using it for making decisions in real time. These results demonstrate that utilizing AI enhances operational effectiveness strongly and increases ROI. At the same time, many problems that hinder AI are data privacy issues, legal compliance and bias within AI systems. Our work contributes to an increasing body of literature on AI in finance and highlights that unlocking the benefi-ts of AI for custodian banks would require further exploration into ethical AI frameworks.