Europe’s T+1 presents an opportunity for capital markets participants to modernize their infrastructure and operations at scale. This is a fork in the road: firms may respond to T+1 by hiring more people, outsourcing, and leveraging existing vendors to manage faster processing times. Or they may take a broader perspective on infrastructure and operations and be ready for a newly automated global market environment, encompassing distributed ledger technology (DLT), generative artificial intelligence (GenAI) and cloud services, among other innovations. We expect a new generation of winners and losers to emerge in capital markets as a result.
Following the successful North American move to a T+1 settlement cycle in May 2024, Europe and the UK are set to follow in October 2027. While the go-live went smoothly in North America, implementation in Europe looks more difficult given the fragmentation and complexity of infrastructure. The compressed settlement timeline will create pressure on front-to-back workflows for banks, custodians and their clients.
This report provides practical guidance on what firms should prioritize to reduce the cost and complexity of the move to T+1, while maximizing the once-in-a-generation opportunity to modernize post-trade processes and technology. The report also considers lessons from North America’s T+1 implementation opportunities taken and missed to re-engineer and automate the business.
Based on conversations with firms across the capital markets ecosystem, this report evaluates lessons learned from the North American implementation of T+1 and ways in which the UK and European transitions differ from the North American move. It outlines the target operating model for T+1 settlement in the UK and Europe and provides a practical roadmap to help market participants minimize the costs and risks of the transition while maximizing the benefits. It is intended for professionals in the front, middle, and back offices, their technology and data providers, and regulators who seek to ensure a successful implementation of accelerated settlement.
A direct link to the report for Finadium research clients is here
For non-subscribers, more information is available here.