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T+1 accelerated settlement
08 Jul 2026
With less than 18 months until Europe’s coordinated T+1 transition, industry leaders assess the operational realities behind accelerated settlement, from client readiness and FX challenges, to automation and data quality
Image: spainter_vfx/stock.adobe.com
Craig Stirling
Securities Product Owner, AccessFintech
Marie-France Dessertenne
T+1 Programme Manager, BNP Paribas Securities Services
Michele Pitts
Global Product Head, Transaction Management, Citi Investor Services
Alex Chow
VP Industry and Regulatory Development, J.P. Morgan
Andy Grayland
Head of Solutions Architecture, Xceptor
With implementation now well advanced, which operational challenges have proved harder to solve than originally anticipated, and which concerns from 2025 have turned out to be less significant than feared? What has surprised you most about the reality of T+1 preparation versus the theory?
Michele Pitts: Primarily the unprecedented complexity of transitioning 32 markets, over 30 central securities depositories (CSDs), and 13 central counterparties (CCPs), coupled with the level of financial market infrastructure change happening across the European markets in conjunction with T+1 planning. Meanwhile concerns from 2025 that have not materialised, i.e. that some markets or market participants would ignore T+1. The industry is actively engaged across Europe. Both buy and sell side participants are preparing for the T+1 transition. If there is any complacency, it is the role of regulators to push for comprehensive readiness.
Another challenge is the reality of T+1 preparation versus the theory. The key recommendation to deliver allocations and confirmations by 23:00 CET by December 2026 is optimal, but certain market participants — particularly those based in other time zones — will likely not be able to meet this requirement.
Alex Chow: One of the initial concerns from industry had been in how some smaller buy side firms were not sufficiently engaged and as a result behind in their preparations. While we see a spectrum of readiness, we have generally found that most of our clients have been well-engaged on Europe T+1 for some time and are defining their approach to some of the specific questions they are facing on their side, such as whether to amend mutual fund settlement cycles for fund managers or in time zone compression for our APAC base.
Although not a surprise — it has been great to see the collaboration in trying to set the conditions for the best possible transition across financial services firms, infrastructures, trade associations and regulatory bodies. We have an established data governance process that is being further enhanced, however aligning the same data methodology as CSDs and as settlement intermediaries can prove to be a challenge. While some industry forums such as the Testing Taskforce and UK Risk and Compliance workstream have made progress in setting parameters around how key T+1 metrics should be calculated, there is not one overall and de facto set of parameters that all stakeholders follow.
A further item to watch in the run up to 2027 will be in the Gating Event, intended to be released in June 2027. With the FAQs and best practice finalised in June 2026, the build specifications from CSDs, both in terms of instructing into the Gating Event or in reporting for when a trade has been gated into, will be crucial to consider, and the gating event in general has come relatively late in the day compared to the other T+1 recommendations. It will be important for firms to assess how the Gating Event could impact them.
Andy Grayland: For many firms, the compliance exercise brought by T+1 has actually been less cumbersome than feared. The real challenges are less about managing risk and more operational, with a need to tighten controls and processes to avoid increased inefficiencies and settlement fails once T+1 is enforced.
What we consistently hear is that fragmentation across internal systems is a huge challenge. For example, when confirms and settlements sit in separate workflows, and those workflows weren’t designed to talk to each other at speed, you end up with pressure points that T+1 simply does not tolerate.
That pressure has caused some firms to cut corners, such as confirming off the back of an affirmation alone to avoid a fine rather than fixing the underlying process. While this might be effective for avoiding penalties, firms miss out on the benefits that T+1 was designed to bring.
Disparate data is another barrier. Our recent maturity benchmarking shows firms are, on average, just over halfway towards best-practice reconciliation. Inconsistent custody data, a lack of data standardisation and automated reporting, process inefficiencies, growing reconciliation complexity, and intraday reconciliation were all cited as real barriers that limit operational scale — and those gaps become even more exposed under T+1.
But probably the most challenging area we are seeing is exception management. The irony is that roughly 80 per cent of reconciliations are relatively clean, straightforward one-to-one matches that automated processes handle well. It is the remaining 20 per cent that consumes disproportionate time and effort, particularly when visibility is limited. Knowing that a break has occurred is one thing, but identifying the source of the problem to resolve it quickly can be difficult.
As matching logic becomes more complex with more enrichment steps, more format translation, more sophisticated lookup rules, exceptions become harder to triage quickly. Firms are routing breaks across multiple teams, reviewing translation tables, and investigating where workflows have failed. Doing this in a much shorter window requires AI-powered automation that reduces the manual burden.
Craig Stirling: The technology challenges have largely proved tractable for those who invested early. What has proven harder is behavioral change — getting all participants across the settlement chain to operate on trade-date timelines rather than simply compressing existing T+2 workflows. Systems can be upgraded; operating rhythms are harder to shift. The concern that settlement failure rates would spike materially at go-live has been less severe than feared for well-prepared firms — but that masks significant dispersion. Firms with genuine STP automation and real-time exception visibility have absorbed the transition relatively smoothly. Those still relying on manual processes or end-of-day batch workflows are carrying a disproportionate operational burden, and some of that is not yet fully visible in aggregate fail statistics.
The biggest surprise has been how much of the pressure has landed on intermediaries compensating for gaps elsewhere in the chain. T+1 exposes every weak link — and the firms with the infrastructure to see those exceptions in real time have a material advantage in resolving them before they become failures. This is accentuated further as firms look to exchange data to resolve issues and realise their data management limitations when looking to stitch the correct data points together.
Marie-France Dessertenne: One of the most important success factors in all the discussions so far is the remarkable collaboration across the entire European ecosystem (UK, EU and Switzerland) that has allowed us to put together a truly common testing plan.
While the bulk of the work is now in place, the industry is still ironing out a few critical points: the potential expansion of gating events beyond what the EU T+1 Industry Committee initially envisaged, the final ready checks for every participant in the settlement chain, or additional developments on T2S and within CSDs.
While the industry has made significant progress in preparing for T+1, shorter settlement cycles leave far less flexibility to resolve operational exceptions. So, another key success factor will be maintaining operational resilience across the end-to-end post trade chain value. A further focus is the timing of the capture and matching of transactions. Clients located in non-European time zones are seeking to ensure timely processing. As long as the spirit of collaboration continues, we are confident the market is on the right track to achieve a successful T+1 transition.
For EU funds, T+1 represents an indirect challenge. Even if EU traditional funds are out of scope of the T+1 change (excluding ETFs on the secondary market), both the recommendations of EU authorities to reduce the fund life cycle and the indirect pressure of the risks associated with the liquidity mismatch between funds liabilities and investments are pushing EU asset managers to review their processes. As impacts are indirect and not subject to a market deadline, these bring less pressure on asset managers, although the underlying processes of navigating the reality of any change of the fund lifecycle are widely more complex than the theory and quite different depending on the fund range features, and sometimes asset classes.
The coordinated UK, EU, and Swiss T+1 transition was designed to minimise cross-border fragmentation, yet FX settlement and time zone misalignment remain persistent concerns. How effectively has the industry addressed these issues in practice, and are there residual risks that the market has yet to fully resolve?
Stirling: The coordinated go-live date was the right decision and has reduced fragmentation risk considerably compared to a staggered approach. But regulatory alignment and operational harmonization are different things. Cut-off times, penalty regimes, and instruction formats still vary across markets, and those differences don’t disappear on 11 October 2027 — they become more consequential.
FX settlement remains the most structurally unresolved issue. The compressed window creates a genuine funding challenge for cross-currency trades, particularly for Asia Pacific managers whose FX execution window is materially narrower once European time zones are factored in. That is not a problem that coordination at the regulatory level fully addresses.
The residual risk the market has not fully resolved is the multi-leg cross-border trade — where securities move between CSDs, cash settles across different payment systems, and each leg operates on a different message standard and cut-off.
AccessFintech’s AccessIQ addresses this by providing both parties with visibility of their respective instructions regardless of where they are alleging, surfacing PSET or SSI differences and cross-border mismatches in real time so remediation is clear without manual investigation. Visibility is the prerequisite for resolution at T+1 speed. Providing prematching insights allow FX orders to be executed earlier reducing the overs/unders risk and trading during more favorable liquidity times.
Chow: The fragmentation and time zone misalignment challenges across the UK, EU and Switzerland are well-documented and broadly understood across the industry. We are seeing financial services firms generally following one consolidated T+1 transition programme, taking a holistic view across all European markets, while also focusing on the impacts and different timelines within specific jurisdictions, which includes intra-EU jurisdictions.
We see that a further area of focus for the industry should be in place of settlement (PSET) exchange and instruction at the point of allocation. As the timeline to instruct and resolve exceptions significantly decreases, it will be important for counterparties to instruct the correct place of settlement at the point of first instruction. That may include a cross-CSD settlement as necessary, which is a process the industry can accommodate today, but which will need to be made more scalable, and with further industry practices around how to instruct cross-CSD settlement an important factor.
There is also continued focus to consider time zone and FX misalignments globally, with Europe moving to T+1. Examples include a potential compression of EU fund settlement cycles, or in the primary market create/redeem practices of ETFs, where for an in-kind creation of a US ETF, collateral calls and payments must be processed much more quickly to provide sufficient time to transact in European stocks.
Dessertenne: Although coordination across the region is remarkable, and the joint testing plan is a good example of this, FX settlement remains a critical challenge indeed. The industry has adapted through greater automation, earlier processing, and wider adoption of automated FX and netting solutions, alongside established infrastructures like continuous linked settlement to reduce settlement risk and improve cross-border efficiency.
Yet, time zone misalignments continue to compress funding and settlement windows, especially for investors bridging Europe and Asia Pacific. Cross-border transactions also rely on tightly sequenced processes (trade execution, FX conversion, funding, settlement), leaving less room for error under T+1, particularly for failed trades or last-minute adjustments. While these structural constraints persist, ongoing investments in standardisation and real-time tracking should progressively mitigate their impacts.
Additionally, buy side firms need to evaluate whether their existing model for funding cross-border trades in a T+1 environment is still workable. If they presently use third parties to execute FX post the execution of the securities trade, they may consider other options such as pre-funding or delegating the FX execution to their custodian. This is a crucial decision to be made rapidly by buy side clients.
From an operational perspective, earlier access to information on trade status, matching, affirmation funding and settlement progress will enable operational teams to identify risks sooner and prioritise actions before market cut-offs. This will be particularly relevant for clients operating across multiple markets and time zones where compressed processing windows require greater anticipation and closer operational coordination.
Pitts: A key objective of the EU T+1 transition has been greater harmonisation. The recommendations in the EU High-Level Roadmap are aimed at all EU markets, but there will still be market specificities after October 2027. TARGET2-Securities (T2S) offers this harmonisation, and as more markets join T2S, a key harmonisation objective will be met.
With FX settlement, ensuring that clients are able to fund their transactions across the transitioning European markets within the compressed timelines is also key. Custodians can support clients with automated FX generation following their trading.
Time zone differences are challenging. Custodians can provide support using follow-the-sun operational support or by providing outsourcing solutions like Citi’s Execution to Custody (E2C) model.
Grayland: In practice, issues still exist. T+1 will bring real benefits to the industry, such as reduced margin and collateral requirements, and lower counterparty risk from shorter open positions. But it does not yet address a core driver of inefficiency in post-trade settlement: a lack of consistency.
ESMA’s recent amendments to the regulatory technical standards are a step in the right direction, including the mandatory use of electronic, standardised communication channels and international messaging standards, and minimising references to communication methods like oral allocations and confirmations.
The problem is mandating an electronic channel does not guarantee a consistent format or universal adoption when getting into bespoke products and structured trades. The biggest cause of inefficiency remains: two counterparties independently booking the same trade in separate systems. This will exist until there is a shared source of truth between them.
Client readiness was widely flagged as a potential weak link in the settlement chain. How has the reality matched expectations, are institutional clients, asset managers and pension funds genuinely prepared, or are custodians still carrying a disproportionate burden in compensating for client-side gaps?
Grayland: Readiness gaps have not been distributed equally. Larger institutional clients with mature operations have adapted well, while others continue to lean on custodians to bridge the gap. Market utilities have made genuine progress consolidating client-side data — for example, automating the collection of standing settlement instructions that used to be chased manually — but custodians are still often left sourcing information from disparate systems and counterparties to fill in what is not captured centrally.
So, while the industry is moving in the right direction, many custodians continue to carry a meaningful share of the operational burden, simply because the underlying fragmentation has not been fully resolved yet.
Dessertenne: The changes to the EU operational timetable and the night-time settlement cycle of T2S raise critical questions for all parties: at what time do you currently send settlement instructions to your custodian? Do you have batch processes that could impact your ability to send instructions before the 23:59 cut-off? There are functionalities introduced with T2S that are already available, i.e. partial settlement, partial release, hold-and-release, linkage, prioritisation. Have you considered implementing them? They could become decisive with the compressed settlement cycle.
Larger institutions already have dedicated transition teams, sit on industry working groups and have injected budget into the technology, data quality and process automation upgrades that the T+1 transition requires. Their roadmaps are visible, they actively co-design the new settlement model with their custodians.
The reality is a little different for smaller, mono-market or regional players. Without dedicated resources, or association participation, many of these firms feel remote from the transformation and look to their custodians to absorb the operational lift. Geography adds another layer of disparity. From a settlement perspective, firms located outside of European time zones have key decisions to make as to how they process on trade date. Probably the highest point of attention is with buy side actors outside of the European region, notably in the Asia Pacific region. There are also pockets of non-automated confirmations which we hope the recent changes to the regulation will help address.
To close the readiness gap, we have launched at the end of 2025 a client roadshow backed by a series of hands-on workshops. Custodians have an important role to play by leveraging operational data to identify recurring behaviours, prioritise client engagement and support continuous improvements. Regular operational reviews based on settlement operational data can help clients strengthen their own operating models while contributing to overall market efficiency.
That is why we are reviewing our clients’ settlement efficiency indicators, measuring the straight-through-processing rate of clients’ instructions, identifying the volume of manual trades, pinpointing the root causes of repairs, and mapping how many transactions settle today at T0, T1, or T2. Such operational indicators provide valuable insight into how prepared clients are for T+1 and can help identify where operational process revisions are needed. We are also actively working with our buy side clients to analyse their data and behaviour, test workflows and help them review their funds strategy where it makes sense.
Chow: There is a full range of readiness across buy side firms, with some clients almost ready to go-live today given enhancements made for this and prior transitions, and others who benefit from further education and outreach. A core part of our T+1 transition programme is our client engagement workstream. We have generally found our clients to have a good degree of focus on T+1 settlement, though there is work to be done prior to go-live.
A key area of focus for us is the development of metrics, both internally and in delivery to clients. Internally, having a view of our client metrics enables us to focus on clients that may benefit the most from further sessions, education, or transparency on metrics. Additionally, having a view on metrics per counterparty and per market enables us to target engagement with areas, markets or stakeholders where we can see the most room for improvement.
Finally, partnering with clients to provide more transparency on the metrics we see for them empowers them to perform their own analysis in potential areas they can improve their operational process.
In short, we are closely working with our institutional clients on the T+1 preparation and are not seeing a disproportionate burden. On the contrary, collaboration, including among trade bodies, has been constructive, as reflected in the joint publications produced across the UK, EU, and Swiss T+1 workstreams.
Pitts: As a custodian, Citi has consistently emphasised to clients that T+1 planning cannot be borne by custodians alone.
T+1 compresses the settlement cycle by more than 80 per cent. In turn, eliminating — or at least reducing manual processes is key for clients to be able to complete settlement on the day after the trade date. Buy side clients must ensure that Standard Settlement Instructions (SSIs) are correct and shared electronically, the Place of Settlement (PSET) is included at the point of allocation and settlement instructions are complete and automatically passed to their custodian to manage the condensed settlement process.
Stirling: Client readiness has been uneven, and custodians have absorbed more of the gap than was anticipated. Large, well-resourced asset managers with modern OMS infrastructure have largely adapted. The picture further down the client spectrum — mid-tier buy side, pension funds, clients still operating semi-manual confirmation workflows — is more mixed.
STP is critical to firms successfully adapting to T+1, but where STP is not achievable, clear ownership and action clarity become the next line of defense. AccessFintech provides that clarity — eliminating lengthy email chains, enabling self-service resolution at the point of booking, and ensuring that where an exception remains open, structured data and communication flows between parties rather than getting lost in bilateral back-and-forth.
The partialling workflow we have built for markets where CSDs or local agents do not facilitate auto-partials has been one of the most practical tools for supporting clients through the transition — significantly reducing unencumbered assets and improving balance sheet and P&L outcomes. That is a tangible operational benefit that directly addresses where client-side gaps have been felt most.
Straight-through processing was identified as essential to T+1 success. Where do STP rates actually stand today across the industry, and are current levels sufficient to prevent a material increase in settlement failures when the October 2027 deadline arrives? Where are the remaining bottlenecks?
Stirling: STP rates tell part of the story, but not all of it. Aggregate rates mask significant variation by participant type, flow, and asset class. Cross-border allocations, certain fund structures, and any workflow with manual confirmation steps are where the remaining bottlenecks concentrate.
What matters equally is what happens when STP breaks down. Exception queues limited to genuinely actionable items — rather than flooded with noise — are what allow operations teams to focus effort where it counts. AccessIQ reduces operational effort in the pre-matching space by approximately 90 per cent by eliminating redundant exception creation and enabling automated remedial actions. That capacity gain is what allows firms to manage the exceptions that remain without defaulting to headcount as the contingency.
The firms that will be best positioned going into and beyond October 2027 are those treating STP improvement and exception management quality as parallel workstreams, not sequential ones.
Grayland: STP rates have increased, but there is still room for improvement. The genuine bottlenecks are fairly consistent across the industry: processing unstructured data that does not arrive in a clean, machine-readable format; inconsistent support across different product types, particularly anything bespoke or OTC; and exceptions still being caught and resolved late rather than prevented upstream.
Some firms have defaulted to adding headcount to manage exceptions manually rather than addressing why those exceptions occur in the first place. That is a workable short-term fix, but it does not scale, and it leaves firms exposed as volumes and time pressure increase. Those well-prepared have spent time identifying the top 5–10 per cent of inefficiencies that lead to breaks and automating them.
Pitts: STP is essential to T+1 success. In the T2S markets and larger European markets, like Sweden, STP rates are high. However, there are smaller markets where there is room for improvement. Generally, where STP rates are high, settlement fails are considerably lower. Bottlenecks from manual processes, poor data quality, and inconsistent use of data fields, need to be addressed to achieve higher STP rates.
Dessertenne: Improving STP remains an important objective, and it should be seen as the outcome of stronger operational discipline. Better data quality, accurate SSI management, timely allocations, earlier client affirmation and proactive exception management remain the main levers to improve settlement efficiency. As settlement cycles shorten, reducing manual interventions and addressing the root causes of recurring repairs will become increasingly important to maintain high settlement performance.
Across BNP Paribas’ Securities Services business, the main operational gains achieved so far have come from process simplification, workflow automation and improved data quality. These initiatives provide operational teams with greater visibility across the settlement cycle, allowing earlier identification of exceptions and more effective prioritisation of operational actions.
From a middle office perspective, trade capture, matching and settlement STP rates are quite high, but timely, automated and accurate broker confirmations need to improve.
The understanding and proactive management of inventory by the buy side is important to ensure that any requirement to move assets is limited. The introduction of the notification at the time of allocation and confirmation of the place of settlement (PSET) is a key step also in reducing failed trades.
Chow: Increasing STP rates has been a fundamental focus for us that precedes the European transition to T+1 Settlement, though it further concentrates attention.
We see good levels of STP rates today, with some clients seeing close to 100 per cent of their instructions flow without manual intervention, though there is more work to be done in other areas. We provide clients with STP rate metrics for settlements and corporate actions instructions as a matter of course.
Assessing STP rates from an industry perspective is challenging, as there is no key set of parameters by which to measure this rate, and there are scenarios where a transaction can flow and flag as STP, but only because of manual flows undertaken beforehand.
Instead, it will be crucial for the industry to review key metrics in the run-up to T+1 go-live, such as the percentage of trades being submitted on trade date as published by EUI in the UK. As firms make enhancements in the lead up to go-live, this number should increase, with the industry aim that improvements made in the lead-up to go-live should offset any reductions at the go-live date. Firms performing a gap analysis against these metrics will be able to identify bottlenecks, such as around inventory management, stakeholder dependency, transaction flow flaws and more.
T+1 has accelerated conversations around AI-driven reconciliation, real-time data sharing and automated exception management. Which specific technology investments have delivered the most tangible operational improvements so far, and how are vendors and custodians collaborating differently as a result of T+1 pressure?
Stirling: Real-time pre-matching capability and consolidated visibility across providers have delivered the most tangible operational improvement. The shift from end-of-day batch exception processing to continuous intraday matching fundamentally changes the failure profile of a settlement operation — problems surface earlier and remediation windows are longer, even as the overall cycle compresses.
The other meaningful shift has been in how data flows between counterparties. The traditional model — each participant maintaining their own trade view and reconciling bilaterally through email — is incompatible with T+1. Platforms that give both sides of a trade a shared, real-time view of the same data have demonstrated measurable improvements in resolution times.
Embracing AI through AccessIQ themes takes this further — facilitating additional STP through root cause analysis and enabling the systematic changes needed to prevent recurring exceptions, not just resolve individual ones. Connecting systems front-to-back and back-to-front allows automated remediation as data flows seamlessly internally and externally, opening further opportunities across inventory management, cash and collateral, and asset servicing.
Grayland: AI agents applied to specific use cases have driven real, tangible operational benefits. For example, trade confirmations are still routinely exchanged as PDFs, SWIFT messages, or free-text emails. Xceptor’s Confirmations Extraction Agent helps our clients extract and normalise large volumes of this unstructured data, improving the speed and accuracy of the confirmation step that feeds into settlement.
Another agent extracts standing settlement instructions from emails and documents, validates them against reference data, and routes exceptions for review to further reduce manual intervention.
AI-driven exception management — clustering similar breaks, surfacing recurring patterns, and flagging anomalies — is starting to cut through what has long been one of the industry’s most persistent pain points: inconsistent, ad hoc manual intervention on the roughly 20 per cent of trades that do not match cleanly.
We should also remember that reconciliation, by its nature, is retrospective. It compares two records after the fact. T+1 demands something closer to real-time matching and validation as data arrives, not a clean-up exercise the next day. The firms making genuine progress are the ones investing in real-time data processing rather than simply speeding up their existing batch-based reconciliation.
Regarding collaboration, the shift we are seeing is AI agents, people, and processes working together inside a robust governance framework. Agentic automation is increasingly expected to operate with validation steps, confidence scoring, and traceable reasoning, so that human teams retain oversight and control even as activity volumes increase.
As a result, the vendor-custodian relationship is no longer just about deploying a tool, but about a partnership focused on designing controls, audit trails, and escalation paths that let firms scale automation without losing regulatory defensibility.
Pitts: There is no doubt that AI will provide long-term benefits in operational processes such as reconciliation and data analysis, however human involvement remains critical to ensure accuracy and reliability of AI, data, and related processes.
Chow: A challenge with enhancing technology across European markets is that it can be difficult for a single solution to work for all markets “out of the box”, with adjustments having to be made per market.
T+1 Settlement gives us the opportunity and impetus to encourage standardisation of market and infrastructure practices. More harmonised processes across jurisdictions enables a more homogenous solution or flow across markets holistically and J.P. Morgan has played a leading role across industry forums in driving standardised processes.
This includes co-chairing of the AMI-SeCo Corporate Events Group (CEG) through Mike Collier, which in March 2026 produced the T+1 Corporate Events Harmonised Implementation Guide. The guide looks to harmonise how market claims and transformations are handled by different markets across Europe, and further defines the buyer protection flow, a process safeguarding that the entitled buyer of a security eligible for an asset servicing event can exercise their election.
Homogenous market process also encourages market-wide adoption of tools such as auto-partial. If a tool is offered across the full range of European markets, firms are more likely to opt-in as it reduces the requirement to run bifurcated flows.
As the market continues to harmonise, we expect to see firms reap greater benefit from enhancements. While all enhancements are important, we see the most benefit in any latency taken out of the settlement lifecycle, whether it is in infrastructures reviewing their operational day, clients transitioning from an end-of-day instruction process to live instruction, or internal improvements.
With T+1 go-live now firmly in sight, attention is beginning to turn to what comes next, whether T+0, tokenised settlement on distributed ledger infrastructure, or real-time gross settlement. How are custodians ensuring that their T+1 investments are genuinely future-proofed, rather than simply solving for the immediate regulatory deadline?
Chow: We are consistently looking to optimise our infrastructure and therefore a clients’ post-trade processes, whether it’s minimising latency from a trade instruction or asset servicing election, providing optimised information for clients to instruct STP or in regularly reviewing and seeking to improve cut-off times. Separately, we are partnering with clients and infrastructures to deliver on initiatives around DLT and AI. What we are seeing already in the US is a trend towards extended settlement times and days (to 24/7), especially in cash and tokenised markets, and we expect this to be a trend for the future in Europe as well.
A successful European T+1 transition should not be taken for granted, and with further markets to transition post-Europe go-live, we expect it to be a continued topic where the industry cannot be complacent.
Stirling: T+1 is not the destination — it is the infrastructure forcing function. The firms investing wisely are building capabilities that scale beyond 2027: real-time data sharing, automated exception management, interoperable connectivity across providers and asset classes. Those aren’t T+1-specific features; they become more valuable as settlement cycles compress further.
AccessFintech’s platform is asset class agnostic and CSD agnostic by design. The same infrastructure that provides consolidated pre-matching visibility across securities markets today extends naturally to derivatives, repo, and other asset classes — and to whatever settlement model comes next including reducing the number of asset movements through our settlement compression offering. Improving data sharing capabilities opens further opportunities across the full post-trade workflow: inventory management, cash and collateral movements, and asset servicing.
T+0 and distributed ledger settlement are directionally correct but remain a multi-year horizon for mainstream securities. The immediate opportunity is eliminating the manual touchpoints and data fragmentation that still exist at T+1. The firms building for that now — not just solving for the regulatory deadline — are the ones building infrastructure that is genuinely future-proofed.
Pitts: The move from T+2 to T+1 is compressing the amount of time to do the same processes as today. The end-of-day process remains the same. CCPs may have only 30 minutes from the close of a trading exchange to net positions and pass the netted instructions to the CSDs. T2S will start its settlement processing at midnight and continue to settle throughout the day until the DVP cut-off. Outside of T2S, settlement will still be processed in batches, but these will be more frequent to improve settlement.
T+0 will completely change the landscape. This might be real-time gross settlement but the expectation is that it will be instantaneous settlement throughout the day, 24/7, using digital assets rather than traditional currencies. Custodians need to prepare for this significant change rather than just the settlement compression and increased automation required for the T+2 to T+1 move.
Accelerated settlement cycles are one component to the future of the industry. We are clear that the future of post-trade is instant so we are making investments geared towards this future while addressing immediate deadlines and needs. This includes building our real-time custody capabilities across areas like corporate events, asset servicing and settlements, and supporting digital and traditional assets through our infrastructure.
Dessertenne: The first step is to clarify what T+0 really means. It can refer to intraday settlement that occurs before the end of the business day, to a batch-process that runs continuously throughout the day, or to true atomic settlement where ownership transfer and payment happen in a single split second. Each interpretation carries different requirements for messaging speed, liquidity management and regulatory oversight. While the industry agrees that T+0 is inevitable, it is not feasible anytime soon.
The necessary regulatory framework, industry-wide process and the willingness to overhaul legacy platforms are still under development. Consequently, we focus on making T+1 as adaptable as possible, so that any future reduction in settlement lag can be achieved by building on an already modernised foundation. From an operational standpoint, future-proofing means investing in capabilities that remain valuable beyond T+1. Flexible operating models, robust operational data, enhanced monitoring capabilities and stronger settlement analytics will support future market changes while continuing to improve day-to-day operational performance. The investments made today should therefore not only facilitate future settlement cycles but also strengthen operational resilience and settlement efficiency across the broader securities services ecosystem.
Grayland: The custodians thinking furthest ahead are building the underlying capabilities that can support real-time settlement today: real-time data processing, AI-enabled exception handling, governed AI workflows, and stronger intraday controls. These are all foundational capabilities that T+0, tokenised settlement, or RTGS will all rely on.
However, the lack of consistency across systems remains a real barrier as settlement cycles compress further. As timelines shrink, both confirming and reconciling two representations of the same trade becomes increasingly difficult to do in the time available.
Progress toward real-time settlement depends on moving toward a single, shared, immutable trade record. For example, via distributed ledger infrastructure, or infrastructure that enables intraday or event-based data, to provide the visibility that T+0 requires. Custodians who are only solving for T+1’s deadline risk having to revisit the same problem all over again when the industry pushes toward T+0.
Securities Product Owner, AccessFintech
Marie-France Dessertenne
T+1 Programme Manager, BNP Paribas Securities Services
Michele Pitts
Global Product Head, Transaction Management, Citi Investor Services
Alex Chow
VP Industry and Regulatory Development, J.P. Morgan
Andy Grayland
Head of Solutions Architecture, Xceptor
With implementation now well advanced, which operational challenges have proved harder to solve than originally anticipated, and which concerns from 2025 have turned out to be less significant than feared? What has surprised you most about the reality of T+1 preparation versus the theory?
Michele Pitts: Primarily the unprecedented complexity of transitioning 32 markets, over 30 central securities depositories (CSDs), and 13 central counterparties (CCPs), coupled with the level of financial market infrastructure change happening across the European markets in conjunction with T+1 planning. Meanwhile concerns from 2025 that have not materialised, i.e. that some markets or market participants would ignore T+1. The industry is actively engaged across Europe. Both buy and sell side participants are preparing for the T+1 transition. If there is any complacency, it is the role of regulators to push for comprehensive readiness.
Another challenge is the reality of T+1 preparation versus the theory. The key recommendation to deliver allocations and confirmations by 23:00 CET by December 2026 is optimal, but certain market participants — particularly those based in other time zones — will likely not be able to meet this requirement.
Alex Chow: One of the initial concerns from industry had been in how some smaller buy side firms were not sufficiently engaged and as a result behind in their preparations. While we see a spectrum of readiness, we have generally found that most of our clients have been well-engaged on Europe T+1 for some time and are defining their approach to some of the specific questions they are facing on their side, such as whether to amend mutual fund settlement cycles for fund managers or in time zone compression for our APAC base.
Although not a surprise — it has been great to see the collaboration in trying to set the conditions for the best possible transition across financial services firms, infrastructures, trade associations and regulatory bodies. We have an established data governance process that is being further enhanced, however aligning the same data methodology as CSDs and as settlement intermediaries can prove to be a challenge. While some industry forums such as the Testing Taskforce and UK Risk and Compliance workstream have made progress in setting parameters around how key T+1 metrics should be calculated, there is not one overall and de facto set of parameters that all stakeholders follow.
A further item to watch in the run up to 2027 will be in the Gating Event, intended to be released in June 2027. With the FAQs and best practice finalised in June 2026, the build specifications from CSDs, both in terms of instructing into the Gating Event or in reporting for when a trade has been gated into, will be crucial to consider, and the gating event in general has come relatively late in the day compared to the other T+1 recommendations. It will be important for firms to assess how the Gating Event could impact them.
Andy Grayland: For many firms, the compliance exercise brought by T+1 has actually been less cumbersome than feared. The real challenges are less about managing risk and more operational, with a need to tighten controls and processes to avoid increased inefficiencies and settlement fails once T+1 is enforced.
What we consistently hear is that fragmentation across internal systems is a huge challenge. For example, when confirms and settlements sit in separate workflows, and those workflows weren’t designed to talk to each other at speed, you end up with pressure points that T+1 simply does not tolerate.
That pressure has caused some firms to cut corners, such as confirming off the back of an affirmation alone to avoid a fine rather than fixing the underlying process. While this might be effective for avoiding penalties, firms miss out on the benefits that T+1 was designed to bring.
Disparate data is another barrier. Our recent maturity benchmarking shows firms are, on average, just over halfway towards best-practice reconciliation. Inconsistent custody data, a lack of data standardisation and automated reporting, process inefficiencies, growing reconciliation complexity, and intraday reconciliation were all cited as real barriers that limit operational scale — and those gaps become even more exposed under T+1.
But probably the most challenging area we are seeing is exception management. The irony is that roughly 80 per cent of reconciliations are relatively clean, straightforward one-to-one matches that automated processes handle well. It is the remaining 20 per cent that consumes disproportionate time and effort, particularly when visibility is limited. Knowing that a break has occurred is one thing, but identifying the source of the problem to resolve it quickly can be difficult.
As matching logic becomes more complex with more enrichment steps, more format translation, more sophisticated lookup rules, exceptions become harder to triage quickly. Firms are routing breaks across multiple teams, reviewing translation tables, and investigating where workflows have failed. Doing this in a much shorter window requires AI-powered automation that reduces the manual burden.
Craig Stirling: The technology challenges have largely proved tractable for those who invested early. What has proven harder is behavioral change — getting all participants across the settlement chain to operate on trade-date timelines rather than simply compressing existing T+2 workflows. Systems can be upgraded; operating rhythms are harder to shift. The concern that settlement failure rates would spike materially at go-live has been less severe than feared for well-prepared firms — but that masks significant dispersion. Firms with genuine STP automation and real-time exception visibility have absorbed the transition relatively smoothly. Those still relying on manual processes or end-of-day batch workflows are carrying a disproportionate operational burden, and some of that is not yet fully visible in aggregate fail statistics.
The biggest surprise has been how much of the pressure has landed on intermediaries compensating for gaps elsewhere in the chain. T+1 exposes every weak link — and the firms with the infrastructure to see those exceptions in real time have a material advantage in resolving them before they become failures. This is accentuated further as firms look to exchange data to resolve issues and realise their data management limitations when looking to stitch the correct data points together.
Marie-France Dessertenne: One of the most important success factors in all the discussions so far is the remarkable collaboration across the entire European ecosystem (UK, EU and Switzerland) that has allowed us to put together a truly common testing plan.
While the bulk of the work is now in place, the industry is still ironing out a few critical points: the potential expansion of gating events beyond what the EU T+1 Industry Committee initially envisaged, the final ready checks for every participant in the settlement chain, or additional developments on T2S and within CSDs.
While the industry has made significant progress in preparing for T+1, shorter settlement cycles leave far less flexibility to resolve operational exceptions. So, another key success factor will be maintaining operational resilience across the end-to-end post trade chain value. A further focus is the timing of the capture and matching of transactions. Clients located in non-European time zones are seeking to ensure timely processing. As long as the spirit of collaboration continues, we are confident the market is on the right track to achieve a successful T+1 transition.
For EU funds, T+1 represents an indirect challenge. Even if EU traditional funds are out of scope of the T+1 change (excluding ETFs on the secondary market), both the recommendations of EU authorities to reduce the fund life cycle and the indirect pressure of the risks associated with the liquidity mismatch between funds liabilities and investments are pushing EU asset managers to review their processes. As impacts are indirect and not subject to a market deadline, these bring less pressure on asset managers, although the underlying processes of navigating the reality of any change of the fund lifecycle are widely more complex than the theory and quite different depending on the fund range features, and sometimes asset classes.
The coordinated UK, EU, and Swiss T+1 transition was designed to minimise cross-border fragmentation, yet FX settlement and time zone misalignment remain persistent concerns. How effectively has the industry addressed these issues in practice, and are there residual risks that the market has yet to fully resolve?
Stirling: The coordinated go-live date was the right decision and has reduced fragmentation risk considerably compared to a staggered approach. But regulatory alignment and operational harmonization are different things. Cut-off times, penalty regimes, and instruction formats still vary across markets, and those differences don’t disappear on 11 October 2027 — they become more consequential.
FX settlement remains the most structurally unresolved issue. The compressed window creates a genuine funding challenge for cross-currency trades, particularly for Asia Pacific managers whose FX execution window is materially narrower once European time zones are factored in. That is not a problem that coordination at the regulatory level fully addresses.
The residual risk the market has not fully resolved is the multi-leg cross-border trade — where securities move between CSDs, cash settles across different payment systems, and each leg operates on a different message standard and cut-off.
AccessFintech’s AccessIQ addresses this by providing both parties with visibility of their respective instructions regardless of where they are alleging, surfacing PSET or SSI differences and cross-border mismatches in real time so remediation is clear without manual investigation. Visibility is the prerequisite for resolution at T+1 speed. Providing prematching insights allow FX orders to be executed earlier reducing the overs/unders risk and trading during more favorable liquidity times.
Chow: The fragmentation and time zone misalignment challenges across the UK, EU and Switzerland are well-documented and broadly understood across the industry. We are seeing financial services firms generally following one consolidated T+1 transition programme, taking a holistic view across all European markets, while also focusing on the impacts and different timelines within specific jurisdictions, which includes intra-EU jurisdictions.
We see that a further area of focus for the industry should be in place of settlement (PSET) exchange and instruction at the point of allocation. As the timeline to instruct and resolve exceptions significantly decreases, it will be important for counterparties to instruct the correct place of settlement at the point of first instruction. That may include a cross-CSD settlement as necessary, which is a process the industry can accommodate today, but which will need to be made more scalable, and with further industry practices around how to instruct cross-CSD settlement an important factor.
There is also continued focus to consider time zone and FX misalignments globally, with Europe moving to T+1. Examples include a potential compression of EU fund settlement cycles, or in the primary market create/redeem practices of ETFs, where for an in-kind creation of a US ETF, collateral calls and payments must be processed much more quickly to provide sufficient time to transact in European stocks.
Dessertenne: Although coordination across the region is remarkable, and the joint testing plan is a good example of this, FX settlement remains a critical challenge indeed. The industry has adapted through greater automation, earlier processing, and wider adoption of automated FX and netting solutions, alongside established infrastructures like continuous linked settlement to reduce settlement risk and improve cross-border efficiency.
Yet, time zone misalignments continue to compress funding and settlement windows, especially for investors bridging Europe and Asia Pacific. Cross-border transactions also rely on tightly sequenced processes (trade execution, FX conversion, funding, settlement), leaving less room for error under T+1, particularly for failed trades or last-minute adjustments. While these structural constraints persist, ongoing investments in standardisation and real-time tracking should progressively mitigate their impacts.
Additionally, buy side firms need to evaluate whether their existing model for funding cross-border trades in a T+1 environment is still workable. If they presently use third parties to execute FX post the execution of the securities trade, they may consider other options such as pre-funding or delegating the FX execution to their custodian. This is a crucial decision to be made rapidly by buy side clients.
From an operational perspective, earlier access to information on trade status, matching, affirmation funding and settlement progress will enable operational teams to identify risks sooner and prioritise actions before market cut-offs. This will be particularly relevant for clients operating across multiple markets and time zones where compressed processing windows require greater anticipation and closer operational coordination.
Pitts: A key objective of the EU T+1 transition has been greater harmonisation. The recommendations in the EU High-Level Roadmap are aimed at all EU markets, but there will still be market specificities after October 2027. TARGET2-Securities (T2S) offers this harmonisation, and as more markets join T2S, a key harmonisation objective will be met.
With FX settlement, ensuring that clients are able to fund their transactions across the transitioning European markets within the compressed timelines is also key. Custodians can support clients with automated FX generation following their trading.
Time zone differences are challenging. Custodians can provide support using follow-the-sun operational support or by providing outsourcing solutions like Citi’s Execution to Custody (E2C) model.
Grayland: In practice, issues still exist. T+1 will bring real benefits to the industry, such as reduced margin and collateral requirements, and lower counterparty risk from shorter open positions. But it does not yet address a core driver of inefficiency in post-trade settlement: a lack of consistency.
ESMA’s recent amendments to the regulatory technical standards are a step in the right direction, including the mandatory use of electronic, standardised communication channels and international messaging standards, and minimising references to communication methods like oral allocations and confirmations.
The problem is mandating an electronic channel does not guarantee a consistent format or universal adoption when getting into bespoke products and structured trades. The biggest cause of inefficiency remains: two counterparties independently booking the same trade in separate systems. This will exist until there is a shared source of truth between them.
Client readiness was widely flagged as a potential weak link in the settlement chain. How has the reality matched expectations, are institutional clients, asset managers and pension funds genuinely prepared, or are custodians still carrying a disproportionate burden in compensating for client-side gaps?
Grayland: Readiness gaps have not been distributed equally. Larger institutional clients with mature operations have adapted well, while others continue to lean on custodians to bridge the gap. Market utilities have made genuine progress consolidating client-side data — for example, automating the collection of standing settlement instructions that used to be chased manually — but custodians are still often left sourcing information from disparate systems and counterparties to fill in what is not captured centrally.
So, while the industry is moving in the right direction, many custodians continue to carry a meaningful share of the operational burden, simply because the underlying fragmentation has not been fully resolved yet.
Dessertenne: The changes to the EU operational timetable and the night-time settlement cycle of T2S raise critical questions for all parties: at what time do you currently send settlement instructions to your custodian? Do you have batch processes that could impact your ability to send instructions before the 23:59 cut-off? There are functionalities introduced with T2S that are already available, i.e. partial settlement, partial release, hold-and-release, linkage, prioritisation. Have you considered implementing them? They could become decisive with the compressed settlement cycle.
Larger institutions already have dedicated transition teams, sit on industry working groups and have injected budget into the technology, data quality and process automation upgrades that the T+1 transition requires. Their roadmaps are visible, they actively co-design the new settlement model with their custodians.
The reality is a little different for smaller, mono-market or regional players. Without dedicated resources, or association participation, many of these firms feel remote from the transformation and look to their custodians to absorb the operational lift. Geography adds another layer of disparity. From a settlement perspective, firms located outside of European time zones have key decisions to make as to how they process on trade date. Probably the highest point of attention is with buy side actors outside of the European region, notably in the Asia Pacific region. There are also pockets of non-automated confirmations which we hope the recent changes to the regulation will help address.
To close the readiness gap, we have launched at the end of 2025 a client roadshow backed by a series of hands-on workshops. Custodians have an important role to play by leveraging operational data to identify recurring behaviours, prioritise client engagement and support continuous improvements. Regular operational reviews based on settlement operational data can help clients strengthen their own operating models while contributing to overall market efficiency.
That is why we are reviewing our clients’ settlement efficiency indicators, measuring the straight-through-processing rate of clients’ instructions, identifying the volume of manual trades, pinpointing the root causes of repairs, and mapping how many transactions settle today at T0, T1, or T2. Such operational indicators provide valuable insight into how prepared clients are for T+1 and can help identify where operational process revisions are needed. We are also actively working with our buy side clients to analyse their data and behaviour, test workflows and help them review their funds strategy where it makes sense.
Chow: There is a full range of readiness across buy side firms, with some clients almost ready to go-live today given enhancements made for this and prior transitions, and others who benefit from further education and outreach. A core part of our T+1 transition programme is our client engagement workstream. We have generally found our clients to have a good degree of focus on T+1 settlement, though there is work to be done prior to go-live.
A key area of focus for us is the development of metrics, both internally and in delivery to clients. Internally, having a view of our client metrics enables us to focus on clients that may benefit the most from further sessions, education, or transparency on metrics. Additionally, having a view on metrics per counterparty and per market enables us to target engagement with areas, markets or stakeholders where we can see the most room for improvement.
Finally, partnering with clients to provide more transparency on the metrics we see for them empowers them to perform their own analysis in potential areas they can improve their operational process.
In short, we are closely working with our institutional clients on the T+1 preparation and are not seeing a disproportionate burden. On the contrary, collaboration, including among trade bodies, has been constructive, as reflected in the joint publications produced across the UK, EU, and Swiss T+1 workstreams.
Pitts: As a custodian, Citi has consistently emphasised to clients that T+1 planning cannot be borne by custodians alone.
T+1 compresses the settlement cycle by more than 80 per cent. In turn, eliminating — or at least reducing manual processes is key for clients to be able to complete settlement on the day after the trade date. Buy side clients must ensure that Standard Settlement Instructions (SSIs) are correct and shared electronically, the Place of Settlement (PSET) is included at the point of allocation and settlement instructions are complete and automatically passed to their custodian to manage the condensed settlement process.
Stirling: Client readiness has been uneven, and custodians have absorbed more of the gap than was anticipated. Large, well-resourced asset managers with modern OMS infrastructure have largely adapted. The picture further down the client spectrum — mid-tier buy side, pension funds, clients still operating semi-manual confirmation workflows — is more mixed.
STP is critical to firms successfully adapting to T+1, but where STP is not achievable, clear ownership and action clarity become the next line of defense. AccessFintech provides that clarity — eliminating lengthy email chains, enabling self-service resolution at the point of booking, and ensuring that where an exception remains open, structured data and communication flows between parties rather than getting lost in bilateral back-and-forth.
The partialling workflow we have built for markets where CSDs or local agents do not facilitate auto-partials has been one of the most practical tools for supporting clients through the transition — significantly reducing unencumbered assets and improving balance sheet and P&L outcomes. That is a tangible operational benefit that directly addresses where client-side gaps have been felt most.
Straight-through processing was identified as essential to T+1 success. Where do STP rates actually stand today across the industry, and are current levels sufficient to prevent a material increase in settlement failures when the October 2027 deadline arrives? Where are the remaining bottlenecks?
Stirling: STP rates tell part of the story, but not all of it. Aggregate rates mask significant variation by participant type, flow, and asset class. Cross-border allocations, certain fund structures, and any workflow with manual confirmation steps are where the remaining bottlenecks concentrate.
What matters equally is what happens when STP breaks down. Exception queues limited to genuinely actionable items — rather than flooded with noise — are what allow operations teams to focus effort where it counts. AccessIQ reduces operational effort in the pre-matching space by approximately 90 per cent by eliminating redundant exception creation and enabling automated remedial actions. That capacity gain is what allows firms to manage the exceptions that remain without defaulting to headcount as the contingency.
The firms that will be best positioned going into and beyond October 2027 are those treating STP improvement and exception management quality as parallel workstreams, not sequential ones.
Grayland: STP rates have increased, but there is still room for improvement. The genuine bottlenecks are fairly consistent across the industry: processing unstructured data that does not arrive in a clean, machine-readable format; inconsistent support across different product types, particularly anything bespoke or OTC; and exceptions still being caught and resolved late rather than prevented upstream.
Some firms have defaulted to adding headcount to manage exceptions manually rather than addressing why those exceptions occur in the first place. That is a workable short-term fix, but it does not scale, and it leaves firms exposed as volumes and time pressure increase. Those well-prepared have spent time identifying the top 5–10 per cent of inefficiencies that lead to breaks and automating them.
Pitts: STP is essential to T+1 success. In the T2S markets and larger European markets, like Sweden, STP rates are high. However, there are smaller markets where there is room for improvement. Generally, where STP rates are high, settlement fails are considerably lower. Bottlenecks from manual processes, poor data quality, and inconsistent use of data fields, need to be addressed to achieve higher STP rates.
Dessertenne: Improving STP remains an important objective, and it should be seen as the outcome of stronger operational discipline. Better data quality, accurate SSI management, timely allocations, earlier client affirmation and proactive exception management remain the main levers to improve settlement efficiency. As settlement cycles shorten, reducing manual interventions and addressing the root causes of recurring repairs will become increasingly important to maintain high settlement performance.
Across BNP Paribas’ Securities Services business, the main operational gains achieved so far have come from process simplification, workflow automation and improved data quality. These initiatives provide operational teams with greater visibility across the settlement cycle, allowing earlier identification of exceptions and more effective prioritisation of operational actions.
From a middle office perspective, trade capture, matching and settlement STP rates are quite high, but timely, automated and accurate broker confirmations need to improve.
The understanding and proactive management of inventory by the buy side is important to ensure that any requirement to move assets is limited. The introduction of the notification at the time of allocation and confirmation of the place of settlement (PSET) is a key step also in reducing failed trades.
Chow: Increasing STP rates has been a fundamental focus for us that precedes the European transition to T+1 Settlement, though it further concentrates attention.
We see good levels of STP rates today, with some clients seeing close to 100 per cent of their instructions flow without manual intervention, though there is more work to be done in other areas. We provide clients with STP rate metrics for settlements and corporate actions instructions as a matter of course.
Assessing STP rates from an industry perspective is challenging, as there is no key set of parameters by which to measure this rate, and there are scenarios where a transaction can flow and flag as STP, but only because of manual flows undertaken beforehand.
Instead, it will be crucial for the industry to review key metrics in the run-up to T+1 go-live, such as the percentage of trades being submitted on trade date as published by EUI in the UK. As firms make enhancements in the lead up to go-live, this number should increase, with the industry aim that improvements made in the lead-up to go-live should offset any reductions at the go-live date. Firms performing a gap analysis against these metrics will be able to identify bottlenecks, such as around inventory management, stakeholder dependency, transaction flow flaws and more.
T+1 has accelerated conversations around AI-driven reconciliation, real-time data sharing and automated exception management. Which specific technology investments have delivered the most tangible operational improvements so far, and how are vendors and custodians collaborating differently as a result of T+1 pressure?
Stirling: Real-time pre-matching capability and consolidated visibility across providers have delivered the most tangible operational improvement. The shift from end-of-day batch exception processing to continuous intraday matching fundamentally changes the failure profile of a settlement operation — problems surface earlier and remediation windows are longer, even as the overall cycle compresses.
The other meaningful shift has been in how data flows between counterparties. The traditional model — each participant maintaining their own trade view and reconciling bilaterally through email — is incompatible with T+1. Platforms that give both sides of a trade a shared, real-time view of the same data have demonstrated measurable improvements in resolution times.
Embracing AI through AccessIQ themes takes this further — facilitating additional STP through root cause analysis and enabling the systematic changes needed to prevent recurring exceptions, not just resolve individual ones. Connecting systems front-to-back and back-to-front allows automated remediation as data flows seamlessly internally and externally, opening further opportunities across inventory management, cash and collateral, and asset servicing.
Grayland: AI agents applied to specific use cases have driven real, tangible operational benefits. For example, trade confirmations are still routinely exchanged as PDFs, SWIFT messages, or free-text emails. Xceptor’s Confirmations Extraction Agent helps our clients extract and normalise large volumes of this unstructured data, improving the speed and accuracy of the confirmation step that feeds into settlement.
Another agent extracts standing settlement instructions from emails and documents, validates them against reference data, and routes exceptions for review to further reduce manual intervention.
AI-driven exception management — clustering similar breaks, surfacing recurring patterns, and flagging anomalies — is starting to cut through what has long been one of the industry’s most persistent pain points: inconsistent, ad hoc manual intervention on the roughly 20 per cent of trades that do not match cleanly.
We should also remember that reconciliation, by its nature, is retrospective. It compares two records after the fact. T+1 demands something closer to real-time matching and validation as data arrives, not a clean-up exercise the next day. The firms making genuine progress are the ones investing in real-time data processing rather than simply speeding up their existing batch-based reconciliation.
Regarding collaboration, the shift we are seeing is AI agents, people, and processes working together inside a robust governance framework. Agentic automation is increasingly expected to operate with validation steps, confidence scoring, and traceable reasoning, so that human teams retain oversight and control even as activity volumes increase.
As a result, the vendor-custodian relationship is no longer just about deploying a tool, but about a partnership focused on designing controls, audit trails, and escalation paths that let firms scale automation without losing regulatory defensibility.
Pitts: There is no doubt that AI will provide long-term benefits in operational processes such as reconciliation and data analysis, however human involvement remains critical to ensure accuracy and reliability of AI, data, and related processes.
Chow: A challenge with enhancing technology across European markets is that it can be difficult for a single solution to work for all markets “out of the box”, with adjustments having to be made per market.
T+1 Settlement gives us the opportunity and impetus to encourage standardisation of market and infrastructure practices. More harmonised processes across jurisdictions enables a more homogenous solution or flow across markets holistically and J.P. Morgan has played a leading role across industry forums in driving standardised processes.
This includes co-chairing of the AMI-SeCo Corporate Events Group (CEG) through Mike Collier, which in March 2026 produced the T+1 Corporate Events Harmonised Implementation Guide. The guide looks to harmonise how market claims and transformations are handled by different markets across Europe, and further defines the buyer protection flow, a process safeguarding that the entitled buyer of a security eligible for an asset servicing event can exercise their election.
Homogenous market process also encourages market-wide adoption of tools such as auto-partial. If a tool is offered across the full range of European markets, firms are more likely to opt-in as it reduces the requirement to run bifurcated flows.
As the market continues to harmonise, we expect to see firms reap greater benefit from enhancements. While all enhancements are important, we see the most benefit in any latency taken out of the settlement lifecycle, whether it is in infrastructures reviewing their operational day, clients transitioning from an end-of-day instruction process to live instruction, or internal improvements.
With T+1 go-live now firmly in sight, attention is beginning to turn to what comes next, whether T+0, tokenised settlement on distributed ledger infrastructure, or real-time gross settlement. How are custodians ensuring that their T+1 investments are genuinely future-proofed, rather than simply solving for the immediate regulatory deadline?
Chow: We are consistently looking to optimise our infrastructure and therefore a clients’ post-trade processes, whether it’s minimising latency from a trade instruction or asset servicing election, providing optimised information for clients to instruct STP or in regularly reviewing and seeking to improve cut-off times. Separately, we are partnering with clients and infrastructures to deliver on initiatives around DLT and AI. What we are seeing already in the US is a trend towards extended settlement times and days (to 24/7), especially in cash and tokenised markets, and we expect this to be a trend for the future in Europe as well.
A successful European T+1 transition should not be taken for granted, and with further markets to transition post-Europe go-live, we expect it to be a continued topic where the industry cannot be complacent.
Stirling: T+1 is not the destination — it is the infrastructure forcing function. The firms investing wisely are building capabilities that scale beyond 2027: real-time data sharing, automated exception management, interoperable connectivity across providers and asset classes. Those aren’t T+1-specific features; they become more valuable as settlement cycles compress further.
AccessFintech’s platform is asset class agnostic and CSD agnostic by design. The same infrastructure that provides consolidated pre-matching visibility across securities markets today extends naturally to derivatives, repo, and other asset classes — and to whatever settlement model comes next including reducing the number of asset movements through our settlement compression offering. Improving data sharing capabilities opens further opportunities across the full post-trade workflow: inventory management, cash and collateral movements, and asset servicing.
T+0 and distributed ledger settlement are directionally correct but remain a multi-year horizon for mainstream securities. The immediate opportunity is eliminating the manual touchpoints and data fragmentation that still exist at T+1. The firms building for that now — not just solving for the regulatory deadline — are the ones building infrastructure that is genuinely future-proofed.
Pitts: The move from T+2 to T+1 is compressing the amount of time to do the same processes as today. The end-of-day process remains the same. CCPs may have only 30 minutes from the close of a trading exchange to net positions and pass the netted instructions to the CSDs. T2S will start its settlement processing at midnight and continue to settle throughout the day until the DVP cut-off. Outside of T2S, settlement will still be processed in batches, but these will be more frequent to improve settlement.
T+0 will completely change the landscape. This might be real-time gross settlement but the expectation is that it will be instantaneous settlement throughout the day, 24/7, using digital assets rather than traditional currencies. Custodians need to prepare for this significant change rather than just the settlement compression and increased automation required for the T+2 to T+1 move.
Accelerated settlement cycles are one component to the future of the industry. We are clear that the future of post-trade is instant so we are making investments geared towards this future while addressing immediate deadlines and needs. This includes building our real-time custody capabilities across areas like corporate events, asset servicing and settlements, and supporting digital and traditional assets through our infrastructure.
Dessertenne: The first step is to clarify what T+0 really means. It can refer to intraday settlement that occurs before the end of the business day, to a batch-process that runs continuously throughout the day, or to true atomic settlement where ownership transfer and payment happen in a single split second. Each interpretation carries different requirements for messaging speed, liquidity management and regulatory oversight. While the industry agrees that T+0 is inevitable, it is not feasible anytime soon.
The necessary regulatory framework, industry-wide process and the willingness to overhaul legacy platforms are still under development. Consequently, we focus on making T+1 as adaptable as possible, so that any future reduction in settlement lag can be achieved by building on an already modernised foundation. From an operational standpoint, future-proofing means investing in capabilities that remain valuable beyond T+1. Flexible operating models, robust operational data, enhanced monitoring capabilities and stronger settlement analytics will support future market changes while continuing to improve day-to-day operational performance. The investments made today should therefore not only facilitate future settlement cycles but also strengthen operational resilience and settlement efficiency across the broader securities services ecosystem.
Grayland: The custodians thinking furthest ahead are building the underlying capabilities that can support real-time settlement today: real-time data processing, AI-enabled exception handling, governed AI workflows, and stronger intraday controls. These are all foundational capabilities that T+0, tokenised settlement, or RTGS will all rely on.
However, the lack of consistency across systems remains a real barrier as settlement cycles compress further. As timelines shrink, both confirming and reconciling two representations of the same trade becomes increasingly difficult to do in the time available.
Progress toward real-time settlement depends on moving toward a single, shared, immutable trade record. For example, via distributed ledger infrastructure, or infrastructure that enables intraday or event-based data, to provide the visibility that T+0 requires. Custodians who are only solving for T+1’s deadline risk having to revisit the same problem all over again when the industry pushes toward T+0.
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