As Europe gears up for the transition to T+1 settlement, this shift represents a broader call to action for asset servicing firms to modernise their operations fundamentally. Central to this transformation is the adoption of modern, real-time, integrated core systems capable of delivering efficient, highly automated processes driven by real-time data. Such an overhaul is essential for boosting client satisfaction and making compliance a seamless part of operations, rather than a separate, costly endeavour.
By Alan Goodrich, ERI
The imperative for modern systems
In a T+1 environment, the window for trade settlement shrinks dramatically. This leaves asset servicing firms with virtually no room for error or delay. Traditional, slow processes simply won’t suffice; they must be replaced by systems that can handle tasks like clearing, settlement, and reconciliation with speed and accuracy. Herein lies the importance of modern, real-time systems.
Such systems are designed to handle transactional data at lightning speed, processing it efficiently to provide up-to-the-minute insights and status updates. This real-time visibility is crucial not only for operational efficiency but also for identifying potential issues before they become significant problems, thus reducing risk and enhancing reliability. Proactive management, enabled by real-time systems, ensures that firms are not just reacting to issues, but anticipating them, facilitating a smoother and more reliable operational environment.
Integration: The heart of efficiency
Having an integrated core system that seamlessly connects different operational functions is crucial. Such integration facilitates well-orchestrated workflows and enhances communication across departments. When systems are integrated, information flows freely and securely between them, reducing redundancies and ensuring consistency. This unified approach is vital for tackling the compressed timelines of T+1 settlement, where every second counts.
The benefits of integration extend beyond internal operations. Clients interacting with firms using integrated systems enjoy faster services, precise and consistent data, and timely communications. This not only enhances satisfaction and fosters trust, but also positions firms as leaders committed to excellence and reliability. Integration transforms the client user-experience and relationship, turning it into a lasting partnership based on transparency and responsiveness, which are invaluable in building trust and therefore a firm’s reputation and client base.
Automation: Redefining operational excellence
Automation is no longer a luxury; it’s a necessity in managing the complexities and speed required by T+1 settlements. Automated processes eliminate manual errors, reduce processing times, and allow human resources to focus on higher-value activities. Automation driven by real-time data optimises resource allocation and enhances decision-making processes, laying the groundwork for both short-term efficiency and long-term strategic gains.
Moreover, automation improves operational resilience. In an industry that is constantly challenged by varying transaction processing volumes and evolving regulations, highly automated systems ensure consistent performance and reliability. They help mitigate risk by enabling quick adaptation to changes, whether in market conditions or regulatory requirements. This agility is critical in maintaining a competitive edge.
Compliance as a byproduct, not a burden
A robust, automated system inherently supports compliance. By ensuring processes are efficient and data is accurate and readily available, compliance becomes a natural outcome of these business processes. This integration reduces the direct and indirect costs associated with compliance activities.
Real-time data feeds into regulatory reporting requirements almost seamlessly, minimising the risk of non-compliance and associated penalties or sanctions. Consequently, compliance becomes an inherent byproduct rather than a separate, onerous task that drains resources. With automated systems, firms can focus more on innovation and growth, rather than being burdened by regulatory demands. Additionally, real-time data enhances audit readiness, providing a transparent and consistent record of transactions that facilitates easy verification and compliance with regulatory standards.
Edge of tomorrow
For asset servicing firms, transitioning to T+1 settlement offers an opportunity to innovate and elevate their operations. Embracing a modern, real-time, integrated core system enables firms to enhance process efficiency, drive automation, and improve client satisfaction. By doing so, they not only meet the demands of a faster settlement cycle but also position themselves as leaders in a rapidly evolving financial landscape. Compliance, then, is not seen as a discrete cost, but an integral part of doing business effectively and ethically.
As the curtain rises on this new era of financial transactions, firms equipped with cutting-edge technology will be poised to lead the charge and capture new growth opportunities. Through strategic innovation and execution, asset servicing can achieve unprecedented levels of success and reliability, offering not just faster services, but smarter and more client-centric solutions.
Conclusion
The transition to T+1 settlement is much more than just a technological upgrade; it is a prerequisite for the incremental shift necessary to redefine how asset servicing firms will operate and compete. Establishing a future-proof foundation through a modern, real-time, integrated core system allows firms to embrace innovation fully, driving continuous improvement and operational excellence. By prioritising this fundamental change, asset servicing firms position themselves to not only meet the immediate demands of a faster settlement cycle but also to thrive in a dynamic, competitive market landscape. This transformation sets the stage for sustainable success and resilience, enabling firms to set new standards for excellence in the financial industry.
Alan Goodrich
Regional Sales Manager at ERI
Fellow of the IAP (Institution of Analysts and Programmers)
Alan has 30+ years of experience in finance and technology, with expertise as a fellow of the Institution of Analysts and Programmers and a general registered representative of The Securities Association. He’s held senior roles in leading financial firms and technology suppliers. Currently, he serves as regional sales manager at ERI, overseeing Benelux, Nordic, Baltic, and SEE territories.
ERI is the supplier of the OLYMPIC Banking System, offering post-trade and asset servicing users award-winning levels of innovation, performance, efficiency, and automation, as well as compliance.