About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Leading Global Custodian Banks Think Custodians Should Be More Involved In The Settlement And Account Instruction Process, According To New Survey

Subscribe to our newsletter

Despite a heightened focus on risk management and increased levels of automation within custodian banks worldwide, the settlement and account instruction (SI) process still relies heavily on manual processes, introducing risks and costs into the trade lifecycle, according to research by Omgeo, the global standard for post-trade efficiency. The survey, conducted by Omgeo in July 2011, gained insights on global custodians’ challenges and thoughts on the future related to this key reference data component. Respondents included eight of the top 25 global custodians and represented 70 percent of the world’s assets under custody.

Nearly 10% of custodian bank clients’ trades fail or need amending after instructing, according to the research, with 40% of banks mentioning that 30% or more of these were due to settlement instruction issues. Respondents cited manual or missing SI data as the main pain points around settlement instructions, with banks primarily using manual methods such as email, the most common method of sharing SI information with their investment manager clients.

At a time where global regulators seek to reduce risk throughout the trade lifecycle, and when Europe is poised to move to a T+2 settlement cycle, firms will face increased pressure to ensure an efficient, transparent process across the trade lifecycle. The further automation of SI data within custodian banks would introduce greater control in the process and improve the data quality gap, as well as promote compliance with industry standards while reducing the risk of claims and compensation resulting from failed trades. Indeed, the majority of banks surveyed (63%) agreed they should have more involvement in the maintenance and updating of SIs and that this would be positively received by the industry as some firms delve more deeply into middle-office outsourcing. 

Mark Bouchea, Executive Director of Product Management, Omgeo, commented, “For 10 years, Omgeo has been focused on bringing increased levels of automation to the post-trade process, including the SI lifecycle. The results of this survey demonstrate an on-going area of opportunity to make the SI process more efficient, while reducing risk within the trade lifecycle. It is great to hear that custodian banks want to take a more active role in this process, as it will benefit the entire community. With increased bank involvement and greater automation, SI accuracy and compliance will only continue to improve.”

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: End-to-End Lineage for Financial Services: The Missing Link for Both Compliance and AI Readiness

The importance of complete robust end-to-end data lineage in financial services and capital markets cannot be overstated. Without the ability to trace and verify data across its lifecycle, many critical workflows – from trade reconciliation to risk management – cannot be executed effectively. At the top of the list is regulatory compliance. Regulators demand a...

BLOG

Busy NeoXam Takes Aim at Private Market Data Challenges

It’s been a busy first half for French data and portfolio management technology provider NeoXam, with expansion of its Australian operations, an addition to its management team and strengthened partnerships with established clients. Amidst this busyness has been a focus on providing private-market data capabilities as buy-side firms increase their exposure to alternatives such as...

EVENT

AI in Capital Markets Summit London

The AI in Capital Markets Summit will explore current and emerging trends in AI, the potential of Generative AI and LLMs and how AI can be applied for efficiencies and business value across a number of use cases, in the front and back office of financial institutions. The agenda will explore the risks and challenges of adopting AI and the foundational technologies and data management capabilities that underpin successful deployment.

GUIDE

Regulatory Data Handbook 2025 – Thirteenth Edition

Welcome to the thirteenth edition of A-Team Group’s Regulatory Data Handbook, a unique and practical guide to capital markets regulation, regulatory change, and the data and data management requirements of compliance across Europe, the UK, US and Asia-Pacific. This year’s edition lands at a moment of accelerating regulatory divergence and intensifying data focused supervision. Inside,...