Two of the largest investment banks in the world have experienced a 30% reduction in trade fails and a 76% drop in email traffic for operational processes after a year-long collaboration.
Citi and JP Morgan have worked with AccessFintech over the past 12 months in a bid to achieve operational efficiencies through data and workflow collaboration.
The reductions refer to trades between Citi and JP Morgan across securities asset classes over this period.
AccessFintech launched its secure collaboration network Synergy three years ago to establish an ecosystem of connected firms including buy-side, sell-side, custodians, and vendors.
For JP Morgan and Citi, the initiatives focused on securities settlements between the two dealers, with specific emphasis on European markets as a prelude to the recently implemented CSDR regulation.
The settlement rules enforce penalties on failed trades and came into force on 1 February 2022.
“We are constantly looking for ways to improve our operations and technology through innovation and using the Synergy Network has allowed us to integrate into one solutions-oriented resource, resulting in more efficiencies for our colleagues and clients,” said Tony Vazquez, global head of securities settlements for Citi.
“AccessFintech’s Synergy Network provides streamlined, automated and flexible services that have helped us reduce the time spent on emails and operational processes and optimise the time working on securities settlements.”
Speaking with The TRADE’s sister publication last week, Pardeep Cassells, financial products at AccessFintech, explained that a deterioration in settlement rates over the past six weeks in Europe has seen banks landed with between €3-5 million in penalties related to CSDR rules.
She also noted how the trend is occurring on a global scale, however Europe is experiencing the most pain following the introduction of penalties under the settlement discipline regime earlier this year.
The fintech, which tracks CSDR penalties flow through its network of tier one banks, buy-sides and 80 different custodians and prime brokers, said it saw $77 million in penalties during February and March as challenges were experienced from the outset. Since then, the rate of penalties has increased further, at least over the past six weeks, Cassells explained.
“Organisations who are using our infrastructure have seen fail rates reduce by 40% by openly sharing data and our ability to bring together different sides of the trades,” Cassells added.
Tom Damico, head of global equity operations at JP Morgan, said: “This test period has demonstrated that enhanced data collaboration and shared workflows enable us to create a more efficient operating model with a significant reduction in the number of exceptions and follow-up emails.”