Perhaps, I am naive when I pose the following question: “Why focus on T+1 instead of putting all the effort into what it will take to get to T+0, and more importantly, are ALL industry stakeholders aligned on the objective.”
I have the benefit of experience on my side, and as I read through the reignited hype around the T+? A topic I cannot help but reflect on a time around about 20 years ago. I was excitedly looking forward to my thirties, enjoying an incredible career growth journey at the top 5 Asset Manager in South Africa. Automation and Efficiency were top of mind as back-office practitioners across the industry were striving toward the holy STP grail.
And then, like a punch in the stomach, an abrupt end arrived for the Global Straight Through Processing Association (GSTPA), the industry’s ambitious attempt to standardise cross-border securities transactions. I seem to recall shedding a tear as fellow industry colleagues commiserated with one another at one of the local watering holes, in walking distance from the local bourse and frequented by a unique group of competitors, who not only knew how to compete but knew when collaboration was more important for the industry as a whole. At the time, being a member of the Asset Management industry, I vividly recall how difficult GSTPA was to sell to the Buy-Side community, otherwise referred to as the end Client. As Asset Managers, we were sceptical, and there was tremendous pushback and reluctance to invest in the offering. The only thing that kept us curious was the lure of standardised processes and reduced errors and costs.
Twenty years on, do we stand a chance of succeeding?
A lot has changed, but equally, a lot remains the same. Legacy systems live on and could potentially pose an obstacle. However, the legacy obstacle diminishes because the pandemic has shown how rapidly new technologies have been adopted and implemented.
Emerging markets leapfrogging their global and more established counterparts have never been in a better position to adopt blockchain and DLT.
The GSTPA 2.0 sequel is unlikely to materialise, which is not a bad thing. We will not witness a virtual matching utility called Transaction Flow Manager (TFM) or one global utility that solves every market problem.
I am optimistic that we will see an ecosystem emerge where all stakeholders have a role, and we prioritise interoperability and standards above which provider or solution is the best.
If Covid-19 has taught us anything, we can achieve anything if we believe we can and work together.
Twenty years ago, achieving a standardised cross-border securities transaction solution may have been unrealistic.
Today, as an industry, I am convinced we can and should focus on T+0, not just T+1.
As a proponent of innovation through applying DLT and other technologies such as AI and robotic process automation, we have the tools and capability to support the end-to-end trade lifecycle through more efficient processes and more accurate outputs.