Citigroup Inc. made a recent announcement about the release of the third installment of its "Securities Services Evolution" whitepaper series which underscores the imminent difficulties that the securities ecosystem will encounter. Substantial impacts on business operations were anticipated by 77% of those surveyed highlighting accelerated settlement as a pivotal focus area for both financial market infrastructures (FMIs) and participants, according to an Aug. 22 news release.
"Our research shows that the rapidly accelerating move to T+1 in major markets poses significant challenges to industry participants," Okan Pekin, Global Head of Securities Services at Citi, said in the release.
Businesses are concentrating their efforts to counteract the effects of acceleration by first concentrating on their customers and counterparties, then on their internal systems and procedures, and ultimately on their personnel and geographic strategy, the release said. Sixty-nine percent of individuals who participated in the study indicated automating and standardizing communications with customers is one of their highest priorities, and 64% of respondents are considering either enhancing or replacing current IT systems.
According to the release, Citi's whitepaper incorporates both quantitative and qualitative data obtained from 12 financial market infrastructures and a wide spectrum of industry stakeholders.
In addition, studies have shown challenges with cash management and liquidity have consistently surfaced over the course of the past three years as the primary impediment to achieving a shorter settlement cycle. According to a release, 80% of market participants believe this will have a big influence on the activities of lending and borrowing securities.
“As market infrastructures continue to evolve, it’s increasingly important for industry participants to work in partnership to strengthen the stability of the overall ecosystem,” Matthew Bax, Global Head of Custody for Securities Services at Citi, said in the release. “Supporting innovation while maximizing global consistency of the client experience remains core to our Securities Services offering.”