Morgan Stanley adds loan deposit feature via Hyperlayer

Morgan Stanley has introduced a loan deposit feature for eligible Wealth Management clients using technology from Hyperlayer. It lets clients receive securities-based loan proceeds into existing accounts.

The feature is designed to apply use-of-proceeds restrictions automatically within Morgan Stanley's current banking systems as clients use the funds.

The launch shows how a large bank can add a customer-facing function without replacing its core banking infrastructure. Hyperlayer worked with Morgan Stanley to build technology that allows rules to be set and executed automatically within existing systems.

Under the new setup, clients can access securities-based loan proceeds through accounts they already hold with Morgan Stanley. The technology then enforces any applicable restrictions on how those proceeds may be used in real time.

Securities-based lending allows clients to borrow against the value of eligible assets held in their investment portfolios. For banks, the product can create operational complexity because proceeds may be subject to conditions that must be monitored after funds are disbursed.

Rather than replacing core banking platforms, Morgan Stanley used Hyperlayer's software to add the feature on top of its existing systems. That reflects a broader pattern in financial services, where banks often seek to update selected processes while limiting disruption to legacy technology.

Hyperlayer, founded in 2023 by Rob Rooney and Paul Rolles, focuses on software for banks that want to configure and automate specific rules within existing infrastructure. It is also working with large financial institutions on similar transformation projects.

Rob Rooney, Co-founder and Chief Executive Officer of Hyperlayer, said the project focused on improving a product already in use rather than overhauling wider systems.

"Every great bank has products that already work well, and the strongest ideas often come from refining one specific product rather than everything at once," said Rob Rooney, Co-founder and Chief Executive Officer of Hyperlayer.

Rooney described securities-based lending as a practical use case for that approach.

"Securities-based lending is a good example. Morgan Stanley Wealth Management already offers a streamlined borrowing experience. Working with them, we built the ability to configure rules inside the account and execute them automatically, in real time. The result is the rapid delivery of one more seamless moment for clients inside the institution they already trust, with no disruption," Rooney said.

Existing systems

Morgan Stanley's technology leadership said the project aimed to widen access options for eligible clients while maintaining compliance with relevant restrictions.

"Our goal was to give eligible clients more options to access their loan proceeds while meeting applicable use-of-proceeds requirements. Working with Hyperlayer, we were able to develop and launch the solution quickly, enhancing the Morgan Stanley banking experience. The technology is extendable, so we aim to apply the same approach to other banking capabilities in the future," said Aleksey Shevchenko, Managing Director, Head of Deposits and Core Banking Technology at Morgan Stanley.

The comments suggest Morgan Stanley could use the same model in other areas where product rules need to be embedded directly into customer account activity. Banks have increasingly looked for ways to make targeted changes to deposit, lending and payments functions without lengthy core system replacement programmes.

For Hyperlayer, the Morgan Stanley deployment offers a reference point in the US market, particularly because it centres on a live client feature rather than a back-office process. For Morgan Stanley, it adds an option for Wealth Management clients seeking to draw on securities-based loans through familiar account channels while keeping restrictions applied automatically at the point of use.