Now in its fourth year, Citi's Securities Services Evolution whitepaper examines how T+1 has reshaped ecosystem boundaries for financial market infrastructures (FMIs) and the expected vs realized impact of the transition on markets globally. It also delves into digital asset commercial adoption rates across various regions worldwide and the evolving preferences towards digital cash options.
The central theme of this year’s whitepaper is the transformation effect that new ecosystem dynamics are having on FMIs and market participants alike as they look to accelerate and automate much more than just their settlement processing. This transformation centers on three broad areas:
FMI transformation
New pressures from a fast-evolving ecosystem are driving investments and activity among global FMIs as they accommodate new competitive pressures and regulatory requirements.
Settlement transformation
The immediate impact of the transitions to T+1 in 2024 and their implications for global market participants, as they prepare for the continuing wave of accelerated settlement across future markets.
DLT and digital assets
The practical choices that firms are making in 2024 on their path to commercializing DLT and digital assets in collateral, fund distribution and private markets, including the implications on network choices and digital cash.
Some notable key findings:
- Digital adoption is happening at different speeds: Asia Pacific and Europe are driving the commercialization of DLT and digital assets with 48% and 46% of respondents respectively actively pursuing initiatives.
- Private blockchain networks are preferred: 64% of sell-side respondents expect to use private networks (managed by banks, technology companies and FMIs) as the tokenization of assets gain momentum.
- Securities lending remains one of the most strongly impacted activities of T+1: 50% of respondents (compared to 33% from last year) saw the most impact on securities lending followed by funding requirements at 49%.
- Changing expectations of accelerated settlements: 40% expect real-time, atomic settlement within the next decade (versus only 13% last year), with Asia most bullish at 42%.
