Although regulation is a powerful driver to increase post-trade automation in the current environment, cost reduction is an equally important pressure – closely followed by risk management, finds SWIFT's Post-Trade Survey 2013.
Clearly these drivers are linked. Improving post-trade automation to meet new regulatory requirements should reduce risk and yield cost benefits over time.
However, it requires upfront investment that is a challenge when – as the survey shows – the majority of respondents expects their budgets for post-trade to either remain the same or decrease in the period to 2015. Indeed, the number one barrier to achieving post-trade efficiency goals is identified as budget constraints.
Barriers two and three are a lack of commitment to use standardised solutions and agreed market practice respectively. When asked to select the single development that would make the biggest impact on post-trade operational efficiency, respondents’ joint top answer is ‘widespread adoption of standardised messaging for communication’.
Their other top answer is ‘availability of a true multi-asset class confirmation system’. “The survey results endorse the value of post-trade automation, with almost three-quarters of respondents saying positive affirmation enables 90 percent or more of trades to settle on time,” comments Paul Taylor, Director, Matching Global Business Development, SWIFT.
“They also show an appetite to do more, by adopting standards, by improving levels of electronic trade confirmation - and by achieving greater buy side involvement in industry post-trade efforts. It is important that the industry achieves significant progress in these areas during the next 12 months, if the post-trade world is to successfully respond to the triple challenges of regulation, cost and risk.”