The UK is set for a considerable market shift with the Accelerated Settlement Taskforce, Technical Group report aiming to transition to a T+1 settlement cycle by the end of the year 2027.
Jonny Fry, ClearBank Head Digital Assets Strategy, noted that this anticipated move will aim to significantly reduce trade processing time in half and boost efficiencies, thus helping with driving the need for greater automation as well as improved performance across the securities trading lifecycle.
In the foreseeable future, we can also expect more streamlined B2B and B2C financial services as a result of these transformative initiatives. In addition to automating standard processes, we can expect much quicker response times to payment requests and considerably reduced settlement times.
Key highlights shared by Johnny Fry of Fintech firm ClearBank are as follows:
- Automation is critical, as manual processes will no longer suffice under the shortened timeline.
- Regulatory clarity is essential, with potential legislative changes to ensure the industry’s readiness.
Although the detailed research report mainly focuses on securities, this expected transition should, without a doubt, increase the overall pressure for real-time settlement as well as extend support for programmability/automation of payments. This, as the compressed settlement timeframe demands a lot more efficient payment processes.
In the coming years, we can expect greater overall efficiencies in payments processes. Already, information travels in real-time so the move towards instantaneous and more cost-effective monetary transactions only seems natural and inevitable. Most essential services including transferring and settling funds should become a lot more accessible as we move towards an increasingly digital future.
Digital securities along with other all-digital financial instruments are expected to accelerate the move towards a more frictionless financial ecosystem. Globally, individuals and business organizations are demanding more competitive services. Only those firms will be able to thrive in the future that embrace innovation and adopt best practices.