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

LIBOR is Ending – But Most Firms Aren’t Ready, Finds Numerix

Subscribe to our newsletter

The decommission of LIBOR is making a huge imprint on the global financial services sector. The transition from LIBOR to alternative reference rates could be the largest financial engineering project the world has ever seen. So what are financial institutions are doing to prepare for the switch to alternative reference rates, and how far along are they in their transition progress? Worryingly, it seems as if less than a third of them are ready – are you one of them?

The 2020 LIBOR Transition Survey from Numerix draws a mixed picture of preparedness for the upcoming transition from LIBOR to risk-free rates, with, notably, only 28% of institutions describing their transition program as mature.

“One conclusion we can derive from our survey is that there appear to be conflicting viewpoints regarding the importance of readiness and priorities,” says Numerix. “While many firms across the financial services industry are aware that the path to transition will be long and complicated, many others seem to lack a clear understanding of the level of focus required to address the real impact of the transition, at least according to our data.”

It is notable from the data that in fact, only a small percentage of survey respondents consider themselves “prepared” for the LIBOR transition. Nearly a third of respondents have not taken any action towards making the necessary technology upgrades, while most respondents said that the primary challenge hampering LIBOR transition efforts is a lack of ARR (alternative risk-free rate) liquidity. A question of real concern is the lack of technological progress. Over 70% of surveyed firms say they have not yet acquired or built the required technology or data systems – which could very well impede their ability to operate following the transition.

While some of the largest financial institutions may already host the technology know-how and can make the investment in building out their own technology and data infrastructure, most firms will be constrained by a lack of domain expertise and technology knowledge to manage this transition in-house. These firms will likely need to consider partnering with a service provider who has the software, digital accelerators, and technology expertise to deliver the necessary support.

But there is a distinct lack of urgency. Almost half of respondents believe the end of LIBOR will be delayed – which could account for the low rate of preparedness.

 

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Best approaches for trade and transaction reporting

Compliance practitioners and technology leaders in capital markets face mounting pressure to ensure that reporting processes are efficient, accurate, and aligned with global standards. Market developments and jurisdictional nuances in regulatory frameworks like MiFID II, EMIR, SFTR and MAS create a continual challenge for compliance teams. This webinar brings together senior RegTech executives and seasoned...

BLOG

Global Regulators Turn Up Heat on Exaggerated AI Claims

Supervisors on both sides of the Atlantic are no longer content with soft warnings about artificial intelligence (AI) hype. From the United States Securities and Exchange Commission (SEC) to the United Kingdom’s Advertising Standards Authority (ASA), the direction of travel is clear: say what you do, do what you say – and prove it. Regulators...

EVENT

Data Management Summit New York City

Now in its 15th year the Data Management Summit NYC brings together the North American data management community to explore how data strategy is evolving to drive business outcomes and speed to market in changing times.

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,...