Increased automation could reduce asset servicing costs, reveals DTCC
18 November 2020 US
Image: TTstudio/Adobe Stock
Depository Trust & Clearing Corporation (DTCC) has estimated that larger broker-dealer firms could save $2 million within asset servicing through the adoption of greater automation.
Asset servicing was one of seven areas of broker cost savings as a result of greater post-trade automation, according to a DTCC survey.
The survey of nine major international global broker-dealers that typically spend between $150 million and $175 million globally on post-trade services related to cash securities, moving to a “no touch processing workflow” would allow them to reduce headcount, repair charges, technology expenses and claims and fees significantly.
The estimated savings per firm were broken down into seven categories, with largest figures attributed to settlements ($10.8 million), trade support ($7 million), financing (between £5 million and $10 million), and technology expenses ($5.4 million).
Other areas where savings can be achieved are SSI reference data ($1.5 million), agent bank fees ($2.3 million), and asset servicing ($2 million), says DTCC.
The survey showed that by leveraging post-trade automation, firms can eliminate redundancies and manual processes, reduce associated costs, and mitigate operational risks.
It can also reduce repair charges, technology expenses and claims and fees significantly, the survey revealed.
Matthew Stauffer, managing director, head of institutional trade processing at DTCC, stated: “The findings of our survey highlight the benefits of leveraging automated post-trade solutions to reduce the costs of operational functions and the risk inherent in manual processes. The adoption of a no-touch workflow allows firms to focus their resources on the parts of their business that create true value.”
Asset servicing was one of seven areas of broker cost savings as a result of greater post-trade automation, according to a DTCC survey.
The survey of nine major international global broker-dealers that typically spend between $150 million and $175 million globally on post-trade services related to cash securities, moving to a “no touch processing workflow” would allow them to reduce headcount, repair charges, technology expenses and claims and fees significantly.
The estimated savings per firm were broken down into seven categories, with largest figures attributed to settlements ($10.8 million), trade support ($7 million), financing (between £5 million and $10 million), and technology expenses ($5.4 million).
Other areas where savings can be achieved are SSI reference data ($1.5 million), agent bank fees ($2.3 million), and asset servicing ($2 million), says DTCC.
The survey showed that by leveraging post-trade automation, firms can eliminate redundancies and manual processes, reduce associated costs, and mitigate operational risks.
It can also reduce repair charges, technology expenses and claims and fees significantly, the survey revealed.
Matthew Stauffer, managing director, head of institutional trade processing at DTCC, stated: “The findings of our survey highlight the benefits of leveraging automated post-trade solutions to reduce the costs of operational functions and the risk inherent in manual processes. The adoption of a no-touch workflow allows firms to focus their resources on the parts of their business that create true value.”
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