Hyperlayer launches loan deposit feature for Morgan Stanley

Hyperlayer has launched a loan deposit feature for Morgan Stanley Wealth Management that lets eligible clients access securities-based loan proceeds through their existing accounts.

Loan proceeds can be deposited directly into accounts clients already use, with restrictions on how those funds may be used applied automatically. Hyperlayer said its system works alongside Morgan Stanley's existing banking infrastructure rather than requiring changes to core systems.

Designed for securities-based lending customers at Morgan Stanley Wealth Management, the feature applies use-of-proceeds rules in real time as clients access and spend the funds.

The launch reflects a narrower approach to banking technology projects, focusing on a specific customer journey rather than a broader overhaul of deposit and lending systems. Founded in 2023, Hyperlayer positions its software as a layer that sits over incumbent banking platforms and adds new functions without replacing them.

For Morgan Stanley Wealth Management, the change gives eligible clients another way to receive proceeds from securities-based loans. By enabling this within existing accounts, it may reduce the need for separate workflows or additional account arrangements.

Rob Rooney, Co-founder and Chief Executive Officer of Hyperlayer, described the project as a targeted product update.

"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," Rooney said.

He added: "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."

How it works

The central element of the feature is the automated enforcement of use-of-proceeds restrictions. In practice, the system applies rules tied to securities-based lending proceeds at the account level, rather than relying on manual checks or separate operational processes after funds are deposited.

That approach matters for banks seeking to update parts of the customer experience without taking on the cost and risk of extensive changes to long-established core banking technology. Large financial institutions often run deposit, payments and lending operations on systems that are difficult to replace, leading many technology suppliers to focus on tools that sit between customer-facing channels and back-end infrastructure.

Morgan Stanley said the work was intended to widen client access options while maintaining compliance with rules governing how loan proceeds may be used.

"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 and Head of Deposits and Core Banking Technology at Morgan Stanley.

Broader trend

The project also points to a broader trend in financial technology procurement among large banks. Rather than replacing full core systems in one step, institutions are increasingly pursuing incremental changes that address a single process, product or client interaction while preserving existing architecture.

For newer banking technology firms, such projects can provide a route into large financial institutions if they can show a feature can be delivered with limited operational disruption. In this case, Hyperlayer said the loan deposit function was built to work with Morgan Stanley's existing systems while embedding restrictions directly into the account experience.

Hyperlayer was founded by Rooney and Paul Rolles and says it is working with large financial institutions on transformation projects. Its work with Morgan Stanley focuses on one of the more operationally sensitive areas of wealth management banking, where client convenience must be balanced against controls on how borrowed funds are handled.

Shevchenko said the technology is extendable, and Morgan Stanley aims to apply the same approach to other banking capabilities in future.