Introduction
The client was standing up a program to successfully manage the transition to T+1 settlement, a highly critical, complex, and time-sensitive initiative. Capco was brought as the primary consulting partner team to work with their Business, Operations, and Technology workstreams throughout the lifecycle of the program.
Why Now?
T+1 settlement industry change required clear objectives for success - executing on an impact assessment to identify gaps, defining a program plan to comply with T+1 readiness, and establishing a robust governance and communication structure. In addition, it was critical to ensure this was not a “missed opportunity” to deliver sustainable and measurable benefits (e.g., automation) and deliver the project portfolio in an agile methodology.
How We Did It
Phase 1 – Impact Assessment
- Document areas of impact across firm-wide systems and processes
- Create roadmap to manage milestones that enable T+1
Phase 2 – Implementation
- Document requirements necessary to achieve a T+1 target operating model
- Utilize the requirements work with technology for configuration and build
- Design a test strategy plan for a comprehensive list of scenarios to execute
- Manage implementation to ensure operational readiness for T+1 go-live
What We Delivered
Capco’s delivery resulted in the following key benefits:
- Readiness for T+1 per regulatory compliance
- Operational efficiency through automation of manual processes
- Reduced operational risk through improved controls and faster response time / break resolution
- Improved / Real-time data flow through front-to-bank trade processing
- Improved client experience through faster front-to-bank service
- Cost benefit through faster access to cash and reduced margin requirements
- Liquidity management by minimizing default risk and more efficient fund distribution
- Improved (faster) regulatory reporting
How We Can Help
With a reduced settlement cycle comes several material changes to the settlement process that may pose technological and operational challenges. Firms will need to accelerate various activities such as liquidity management, FX processing, and margin call calculation while also reducing the time allowed to settle transactions. Capco has experience supporting Tier 1 Global Banks implement accelerated settlement cycles from end-to-end. In the industry’s prior acceleration from T+3 to T+2, Capco was an integral player in ensuring organizations were effectively migrating to the shortened settlement cycle while meeting regulatory expectations and timelines. As other regions prepare for the complex shift to T+1 adoption, Capco is a well-suited partner to guide firms in this journey.