From compliance to competitiveness: Unlocking the next era of securities finance
30 September 2025
Tina Joshi, head of Íø±¬³Ô¹Ï Finance and Collateral Management Solutions for North America at Broadridge, considers how the region is reframing securities finance from regulatory obligation to a driver of profitability and market advantage
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Turning pressure into potential
For much of the past decade, securities finance and collateral management in North America have operated under the weight of regulatory change. Success was often measured by how effectively an institution could absorb new reporting requirements, adapt to compressed settlement cycles, or navigate fresh capital charges. Compliance was the mandate, and most firms treated these developments as unavoidable obligations.
Yet the conversation has now shifted. Regulation remains a core driver, but instead of simply reacting, the most forward-looking institutions are reframing compliance as an opportunity to create value.
This repositioning is transforming securities finance from a defensive, operational function into a strategic lever at the centre of competitiveness. The combination of transparency, digitisation, and capital optimisation has elevated collateral from back-office necessity to front-office currency. In North America, where more than half of global securities lending activity originates, this evolution is setting the standard for the rest of the world.
The regulatory landscape as a catalyst
The past two years have marked a series of watershed developments in US and Canadian markets. The transition to T+1 settlement in 2024 forced institutions to radically accelerate their operational tempo, making intraday decisions about liquidity a business-critical function. The implementation of the US Íø±¬³Ô¹Ï and Exchange Commission’s (SEC’s) Rule 10c-1 began to reshape the transparency of securities lending transactions, demanding far more timely and granular disclosures. Meanwhile, US regulators advanced Basel III capital rules, raising the cost of certain activities and placing balance sheet management under a spotlight.
Far from being distractions, these regulatory milestones are catalysts for change. They have forced firms to modernise data strategies, accelerate automation, and reconsider how collateral is valued. The North American market has responded in kind, generating solid activity even amid rising compliance demands.
Íø±¬³Ô¹Ï finance revenues topped roughly US$11.7 billion globally in 2024, with North America once again dominating the share. US equities remain the workhorse of lending revenues, while demand for high-quality liquid assets (HQLA) such as Treasuries and Canadian government bonds has only intensified. The compliance backdrop, in short, now sets the groundwork for competitive differentiation.
Data as competitive intelligence
One of the most important legacies of regulatory reform has been data. Rule 10c-1, Basel requirements, and settlement compression have all made transparency unavoidable. Firms are collecting transaction, counterparty, and collateral data at a scope and depth that would have been unthinkable only a decade ago. The obvious use of this data is compliance reporting, delivered accurately and on time. But the more interesting story is what comes next.
Institutions are learning to treat compliance data as a form of competitive intelligence. Those that can analyse it in real time are now predicting settlement bottlenecks before they occur, deploying collateral more effectively to reduce funding costs, and benchmarking performance not only against their own historical operations but also in line with wider market activity. What initially looked like a reporting burden has become a wellspring of insight — and firms that embrace this shift are strengthening their positions.
The Depository Trust & Clearing Corporation’s (DTCC’s) 2025 year-end review found that US equity settlement fails averaged around US$65 billion to US$70 billion notional per day in late 2024, after an initial spike toward US$100 billion per day when T+1 went live in May — illustrating both the scale of the challenge and the opportunity for predictive analytics.
Collateral: The new strategic currency
Collateral, once relegated to operational backwaters, has emerged as the central pillar of contemporary securities finance. The introduction of Basel III endgame measures means every security and deposit carries a sharper capital cost. Firms that treat collateral allocation as an afterthought are, in effect, leaving margin on the table.
This has brought about a profound cultural shift. Collateral management is no longer a nightly or weekly task left to back-office administrators. It is now a real-time strategic discussion that directly influences trading outcomes. Buy side institutions, including asset managers and pensions, recognise that maximising securities lending revenues requires sophisticated collateral frameworks that also respect stewardship and ESG obligations.
On the sell side, broker-dealers increasingly describe collateral optimisation not as an operational discipline but as a core component of risk-weighted balance sheet strategy. In both contexts, the message is consistent — collateral is not a cost; it is a strategic currency in its own right.
Technology as an enabler, not an afterthought
Technological change provides the practical means by which compliance transforms into competitiveness. The adoption of automation and straight-through processing (STP) has significantly reduced operational risk, particularly around margin calls and substitutions.
AI is accelerating this shift. Broadridge’s 2025 Digital Transformation Study found that 78 per cent of executives expect AI to significantly reshape operations within two years, and 72 per cent of firms are already deploying early AI applications — from compliance monitoring to liquidity forecasting.
Perhaps most striking, the first live deployments of tokenised collateral — whether in the form of tokenised money-market funds or digital representations of US Treasuries — have demonstrated that the once-hyped blockchain conversation can be translated into practical results in North America.
It is vital to note that these technologies are not being applied for the sake of novelty. Market participants are pragmatic; they adopt what delivers real cost savings, reduces fail rates, or improves settlement performance under T+1 timelines. The drive toward digitisation is therefore best understood not as a speculative bet on the future, but as a response to pressing, present-day operational demands.
Cultural reorientation across the industry
Perhaps the most profound, and least quantifiable, change is cultural. The silos that once divided repo desks, derivatives margin groups, and securities lending operations are being dismantled. Firms are evolving toward centralised liquidity hubs that treat the balance sheet holistically. These groups bring together risk managers, technologists, and front-office decision-makers, recognising that every collateral move has implications for capital charges, client relationships, and trading capacity.
This cultural shift is elevating the securities finance function to new prominence. Instead of being buried within operations, collateral specialists are increasingly present in trading discussions, regulatory planning, and even strategic boardroom debates. By integrating what was once an afterthought into the centre of strategy, institutions are redefining their own organisational DNA.
North America’s global influence
With close to 60 per cent of all global securities lending revenues generated in North America, the region’s approach sets the tone internationally. Other markets are watching how US and Canadian firms adapt to T+1, how digital collateral scales, and how capital efficiency models evolve under Basel’s final rules.
The innovations pursued by North American institutions — whether AI-driven liquidity platforms or integrated operational hubs — are already being studied and imitated abroad. In turning compliance into competitiveness, the region is not merely responding to regulation; it is showing the rest of the world how modern securities finance can be done.
Enabling the shift: The Broadridge view
Technology partners are central to this transformation, and Broadridge’s perspective illustrates the trajectory of the market. Across clients, a few themes recur. Reporting is most effective when it is not a bolt-on but rather embedded directly into daily workflows.
Firms achieve resilience when they have unified platforms capable of providing real-time visibility across lending, repo, and derivatives, avoiding the blind spots that fragmented systems too often create. And innovation succeeds when it is deployed pragmatically — gradually introducing AI or tokenisation to address pain points that matter today, rather than chasing futuristic abstractions.
The insight that emerges from this cross-section of industry experiences is simple: being compliant is table stakes. The genuine competitive edge appears when firms use compliance-driven technology investments to build agility that can flex with new market conditions, new asset classes, and new client demands.
Looking forward: A competitive liquidity landscape
As markets evolve, the pressures that defined the last few years will not recede. Settlement cycles are likely to compress further, perhaps toward same-day standards in the long term. Tokenised collateral, still in its early phases, will almost certainly scale as investors seek to free trapped liquidity. Capital optimisation challenges under Basel III will become more pronounced, not less. And the rising influence of ESG considerations will continue to shape collateral and lending policies.
Firms across North America recognise that reacting to each of these developments in isolation would be unsustainable. What separates leaders from laggards is the ability to treat every regulatory, market, or technological shift as another step toward integrated, real-time liquidity management. In that sense, competitiveness is not about ticking boxes faster; it is about building an infrastructure — and a mindset — that embraces change as opportunity.
Conclusion: Beyond the minimum
The transformation underway in North American securities finance and collateral management reflects a larger truth about modern capital markets. Compliance may keep the lights on, but it does not guarantee strategic success. The firms that thrive are those that treat compliance as the starting line, not the finish line.
By leveraging regulatory transparency, operational digitisation, and cultural integration, institutions are unlocking entirely new forms of competitiveness. Íø±¬³Ô¹Ï finance is no longer just a back-office practice — it has become central to how firms manage risk, fund balance sheets, and serve clients.
In a world where daily settlement fails average US$70 billion, government bonds dominate nearly half of loan balances, and tokenised infrastructures are processing over 100,000 transactions a day, the ability to transform compliance into measurable competitive advantage will define the winners of the next era.
For much of the past decade, securities finance and collateral management in North America have operated under the weight of regulatory change. Success was often measured by how effectively an institution could absorb new reporting requirements, adapt to compressed settlement cycles, or navigate fresh capital charges. Compliance was the mandate, and most firms treated these developments as unavoidable obligations.
Yet the conversation has now shifted. Regulation remains a core driver, but instead of simply reacting, the most forward-looking institutions are reframing compliance as an opportunity to create value.
This repositioning is transforming securities finance from a defensive, operational function into a strategic lever at the centre of competitiveness. The combination of transparency, digitisation, and capital optimisation has elevated collateral from back-office necessity to front-office currency. In North America, where more than half of global securities lending activity originates, this evolution is setting the standard for the rest of the world.
The regulatory landscape as a catalyst
The past two years have marked a series of watershed developments in US and Canadian markets. The transition to T+1 settlement in 2024 forced institutions to radically accelerate their operational tempo, making intraday decisions about liquidity a business-critical function. The implementation of the US Íø±¬³Ô¹Ï and Exchange Commission’s (SEC’s) Rule 10c-1 began to reshape the transparency of securities lending transactions, demanding far more timely and granular disclosures. Meanwhile, US regulators advanced Basel III capital rules, raising the cost of certain activities and placing balance sheet management under a spotlight.
Far from being distractions, these regulatory milestones are catalysts for change. They have forced firms to modernise data strategies, accelerate automation, and reconsider how collateral is valued. The North American market has responded in kind, generating solid activity even amid rising compliance demands.
Íø±¬³Ô¹Ï finance revenues topped roughly US$11.7 billion globally in 2024, with North America once again dominating the share. US equities remain the workhorse of lending revenues, while demand for high-quality liquid assets (HQLA) such as Treasuries and Canadian government bonds has only intensified. The compliance backdrop, in short, now sets the groundwork for competitive differentiation.
Data as competitive intelligence
One of the most important legacies of regulatory reform has been data. Rule 10c-1, Basel requirements, and settlement compression have all made transparency unavoidable. Firms are collecting transaction, counterparty, and collateral data at a scope and depth that would have been unthinkable only a decade ago. The obvious use of this data is compliance reporting, delivered accurately and on time. But the more interesting story is what comes next.
Institutions are learning to treat compliance data as a form of competitive intelligence. Those that can analyse it in real time are now predicting settlement bottlenecks before they occur, deploying collateral more effectively to reduce funding costs, and benchmarking performance not only against their own historical operations but also in line with wider market activity. What initially looked like a reporting burden has become a wellspring of insight — and firms that embrace this shift are strengthening their positions.
The Depository Trust & Clearing Corporation’s (DTCC’s) 2025 year-end review found that US equity settlement fails averaged around US$65 billion to US$70 billion notional per day in late 2024, after an initial spike toward US$100 billion per day when T+1 went live in May — illustrating both the scale of the challenge and the opportunity for predictive analytics.
Collateral: The new strategic currency
Collateral, once relegated to operational backwaters, has emerged as the central pillar of contemporary securities finance. The introduction of Basel III endgame measures means every security and deposit carries a sharper capital cost. Firms that treat collateral allocation as an afterthought are, in effect, leaving margin on the table.
This has brought about a profound cultural shift. Collateral management is no longer a nightly or weekly task left to back-office administrators. It is now a real-time strategic discussion that directly influences trading outcomes. Buy side institutions, including asset managers and pensions, recognise that maximising securities lending revenues requires sophisticated collateral frameworks that also respect stewardship and ESG obligations.
On the sell side, broker-dealers increasingly describe collateral optimisation not as an operational discipline but as a core component of risk-weighted balance sheet strategy. In both contexts, the message is consistent — collateral is not a cost; it is a strategic currency in its own right.
Technology as an enabler, not an afterthought
Technological change provides the practical means by which compliance transforms into competitiveness. The adoption of automation and straight-through processing (STP) has significantly reduced operational risk, particularly around margin calls and substitutions.
AI is accelerating this shift. Broadridge’s 2025 Digital Transformation Study found that 78 per cent of executives expect AI to significantly reshape operations within two years, and 72 per cent of firms are already deploying early AI applications — from compliance monitoring to liquidity forecasting.
Perhaps most striking, the first live deployments of tokenised collateral — whether in the form of tokenised money-market funds or digital representations of US Treasuries — have demonstrated that the once-hyped blockchain conversation can be translated into practical results in North America.
It is vital to note that these technologies are not being applied for the sake of novelty. Market participants are pragmatic; they adopt what delivers real cost savings, reduces fail rates, or improves settlement performance under T+1 timelines. The drive toward digitisation is therefore best understood not as a speculative bet on the future, but as a response to pressing, present-day operational demands.
Cultural reorientation across the industry
Perhaps the most profound, and least quantifiable, change is cultural. The silos that once divided repo desks, derivatives margin groups, and securities lending operations are being dismantled. Firms are evolving toward centralised liquidity hubs that treat the balance sheet holistically. These groups bring together risk managers, technologists, and front-office decision-makers, recognising that every collateral move has implications for capital charges, client relationships, and trading capacity.
This cultural shift is elevating the securities finance function to new prominence. Instead of being buried within operations, collateral specialists are increasingly present in trading discussions, regulatory planning, and even strategic boardroom debates. By integrating what was once an afterthought into the centre of strategy, institutions are redefining their own organisational DNA.
North America’s global influence
With close to 60 per cent of all global securities lending revenues generated in North America, the region’s approach sets the tone internationally. Other markets are watching how US and Canadian firms adapt to T+1, how digital collateral scales, and how capital efficiency models evolve under Basel’s final rules.
The innovations pursued by North American institutions — whether AI-driven liquidity platforms or integrated operational hubs — are already being studied and imitated abroad. In turning compliance into competitiveness, the region is not merely responding to regulation; it is showing the rest of the world how modern securities finance can be done.
Enabling the shift: The Broadridge view
Technology partners are central to this transformation, and Broadridge’s perspective illustrates the trajectory of the market. Across clients, a few themes recur. Reporting is most effective when it is not a bolt-on but rather embedded directly into daily workflows.
Firms achieve resilience when they have unified platforms capable of providing real-time visibility across lending, repo, and derivatives, avoiding the blind spots that fragmented systems too often create. And innovation succeeds when it is deployed pragmatically — gradually introducing AI or tokenisation to address pain points that matter today, rather than chasing futuristic abstractions.
The insight that emerges from this cross-section of industry experiences is simple: being compliant is table stakes. The genuine competitive edge appears when firms use compliance-driven technology investments to build agility that can flex with new market conditions, new asset classes, and new client demands.
Looking forward: A competitive liquidity landscape
As markets evolve, the pressures that defined the last few years will not recede. Settlement cycles are likely to compress further, perhaps toward same-day standards in the long term. Tokenised collateral, still in its early phases, will almost certainly scale as investors seek to free trapped liquidity. Capital optimisation challenges under Basel III will become more pronounced, not less. And the rising influence of ESG considerations will continue to shape collateral and lending policies.
Firms across North America recognise that reacting to each of these developments in isolation would be unsustainable. What separates leaders from laggards is the ability to treat every regulatory, market, or technological shift as another step toward integrated, real-time liquidity management. In that sense, competitiveness is not about ticking boxes faster; it is about building an infrastructure — and a mindset — that embraces change as opportunity.
Conclusion: Beyond the minimum
The transformation underway in North American securities finance and collateral management reflects a larger truth about modern capital markets. Compliance may keep the lights on, but it does not guarantee strategic success. The firms that thrive are those that treat compliance as the starting line, not the finish line.
By leveraging regulatory transparency, operational digitisation, and cultural integration, institutions are unlocking entirely new forms of competitiveness. Íø±¬³Ô¹Ï finance is no longer just a back-office practice — it has become central to how firms manage risk, fund balance sheets, and serve clients.
In a world where daily settlement fails average US$70 billion, government bonds dominate nearly half of loan balances, and tokenised infrastructures are processing over 100,000 transactions a day, the ability to transform compliance into measurable competitive advantage will define the winners of the next era.
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