Citi Securities Services Evolution 2025

Securities Services Evolution 2025 | 21 Internal system transitions (particularly for complex areas such as cashmanagement and funding) then come afterwards, once key pressure points have presented themselves and when client activity is stable. This emerging best practice is a key takeaway for all firms looking to prepare for future waves of T+1 transition, wherever they are. And where does T+1’s impact lie? Trade fail rates alongside affirmation rates and margin reduction were the three main ‘temperature checks’ for the success of T+1 in the US. One year on from the transition, the impact of T+1 on all of these areas has significantly lightened. Funding andmargining requirements have become notably less acute (with 25%significant impact in 2025 vs 49% in 2024), as have counterpartymargining costs (from47% in 2024 to 28% in 2025) (Figure 9). Similarly, the reduction in thenumber of people seeing a significant impact of T+1 onmiddle/back-office headcounts (44%2024 vs 23%2025) is also positive – consistent with SIFMA’s after-action debrief 10 that reported a decline in headcounts focused on T+1 in the months following the transition. That does not mean that all pressures have receded. Although volumes of trade fails have either remained consistent or, in some cases, declined following the 2024 transitions, the pressures felt by organizations inmanaging those fails appears to not to be lessening over time. One year on since T+1 in North America, 31% of respondents to this year’s survey feel their organization is strongly impacted by trade fail pressures – indicating a continuing need tomanage and support faster settlements across the organization, most acutely by those outside of North America. Figure 9: Impact of T+1 on key processes Pressure on trade fail rates has risen Across the world, trade cycle pressures have not yet returned to pre-T+1 levels, as the pressures of settling trades one day faster continue to be felt across trade settlements, lending, funding and treasury management . The case for continued investment in trade flow automation is as clear today as it was during 2024 transitions. Question: Based on your experience of T+1 being live (in Argentina, Canada, India, Jamaica, Mexico, Peru and the USA), what are the impacts of a shortened settlement cycle on your organization? Expressed as: % of respondents citing a significant impact for each activity due to T+1. *Not included in 2023. Trade fail rates Counterparty margin requirements* Funding/ margining requirements Securities lending activity Funding costs* Middle/ Back office headcounts “The old tactics won’t work for T+1. We have to be asking – how do I future proof my processes and what level of reengineering is needed?” Andrew Douglas, UK Accelerated Settlement Taskforce 50% 24% 49% 25% 44% 23% 47% 28% 42% 28% 2025 2024 2023 2023: 27% 2025: 31% Trade fails 2024: 28%