The next frontier of securities finance: Eliminating friction before it starts
16 October 2025
Gabino Roche Jr, CEO and founder of Saphyre, discusses the fear of operational drag and how the firm has shifted from reactive post-trade cleanups to pre-trade readiness
Image: Gabino Roche Jr
The global securities lending market has long operated under an assumption of friction.
This includes delays in onboarding new counterparties, mismatched standing settlement instructions (SSIs), endless legal agreement amendments with details like pledge eligibility, and post-trade reconciliations that spiral into costly operational fire drills.
Despite sweeping digitisation elsewhere in capital markets, the underlying fabric of securities finance operations has not evolved enough. The result? Persistent trade fails, ballooning operational overhead, and lost time-to-market for lending desks already facing thinner spreads and growing regulatory complexity.
Every market participant knows the symptoms. Fewer realise that the cure lies in moving the entire process forward in time 鈥� from reactive post-trade cleanups to pre-trade readiness.
That is the shift now being driven by Saphyre, a fintech that has a patented, AI-powered platform which is rapidly becoming the connective tissue for operational efficiency across the pre and post-trade lifecycle.
The cost of friction in a margin-compressed world
Ask any head of securities lending or operations what keeps them up at night, and you will hear a familiar refrain: operational drag.
When a new lending account is onboarded, it can take weeks 鈥� or longer 鈥� before it is fully 鈥榬eady-to-trade鈥�. Legal agreements must be exchanged, approved, and stored. Agent lending disclosure (ALD) must be aligned. SSIs need to be validated and synchronised across multiple parties and systems. Each step introduces risk and cost.
鈥淓very time you rely on email or spreadsheets to confirm data, you鈥檙e inviting latency,鈥� explains one global head of securities finance operations at a Tier-1 bank. 鈥淏y the time you discover a mismatch, it鈥檚 too late 鈥� the trade has failed, and the damage is done.鈥�
According to studies from the Association for Financial Markets in Europe (AFME) 鈥� 鈥楢FME & Euroclear Post-Trade Fail Analysis 2020鈥� 鈥� and the Depository Trust & Clearing Corporation (DTCC) 鈥� 鈥楧TCC Settlement Efficiency Forum Reports 2019-2021鈥� 鈥� between 30 and 40 per cent of settlement fails across securities markets can be traced back to reference data or settlement instruction errors. The cost of remediation 鈥� manual intervention, failed trade fees, and delayed collateral movements 鈥� adds up quickly. And that is before considering the opportunity cost: while counterparties untangle operational knots, trading desks lose alpha.
In a world where basis points are increasingly precious, operational friction becomes a silent tax on performance.
From post-trade to pre-trade: A paradigm shift
The industry鈥檚 traditional response has been to automate post-trade processes 鈥� exception management, reconciliation, and settlement. While those advances are valuable, it treats symptoms, not causes.
Saphyre鈥檚 approach turns that model on its head. Instead of waiting for trades to fail, Saphyre鈥檚 technology pre-validates and synchronises data and documentation before trading begins.
Its platform digitises onboarding documentation and SSIs, automates legal agreement amendments, and extracts, verifies, and maps data across counterparties and systems. Using patented AI and a shared network architecture, Saphyre ensures that both sides of a trade start with the same, validated information 鈥� creating a true 鈥榬eady-to-lend鈥� status before execution.
This shift 鈥� what Saphyre calls pre-trade intelligence 鈥� removes the bulk of downstream exceptions that have long plagued securities lending operations. As more firms join the network, the benefits compound. Once a counterparty鈥檚 data and documents are captured, validated, and stored in Saphyre, they can be reused across new funds, accounts, and transactions without repeating the onboarding process.
Each data element, such as an updated SSI or tax form, is automatically propagated in real time to all previously permissioned parties and their systems. In short: submit once, reuse infinitely.
The result is a continuously reconciled, cross-institution golden record of operational data. Because Saphyre integrates with major custodians, brokers, and buy side order management systems, this data does not live in isolation 鈥� it flows directly across front, middle, and back-office ecosystems.
Onboarding: From weeks to hours
Every new account or fund setup requires Know Your Customer (KYC) documentation, static data, and operational alignment across multiple parties 鈥� often handled via endless email chains. Large institutions can spend 20 to 30 business days onboarding a single new counterparty.
Saphyre鈥檚 AI Agent for Onboarding, launched earlier this year, changes that. Clients simply email documents or data files to the system, which automatically extracts, validates, and populates required fields. Missing items trigger intelligent follow-ups, and counterparties are notified when 鈥榬eady-to-trade鈥� status is achieved.
Early adopters reported that onboarding timelines had reduced by 75 per cent, freeing staff for higher-value work and enabling front-office desks to deploy capital faster.
The network effect: Data that gets smarter
Unlike traditional workflow tools, Saphyre functions as a shared network. Each new participant strengthens the ecosystem. Once an account is onboarded, validated information becomes instantly accessible (with permissions) to other counterparties within the network. This creates a positive network externality 鈥� the value of the system increases as more institutions connect.
Over 100 global financial institutions now use Saphyre鈥檚 platform, representing trillions in assets. The resulting data network enables proactive issue resolution, early discrepancy detection, and standardised operational alignment across markets and asset classes. It also delivers what the industry has long sought: a continuously updated view of counterparty readiness across the entire lifecycle.
Bridging the front, middle, and back office divide
网爆吃瓜 lending operations have traditionally been fragmented: the front office executes trades, the middle office validates them, and the back office settles them 鈥� often with limited data flow between systems. Saphyre鈥檚 market infrastructure bridges that divide.
By pushing accurate, validated operational data upstream, front offices know in advance whether a counterparty is ready-to-lend. Middle office teams gain visibility into data lineage and version control, while back offices rely on synchronised SSIs and legal parameters at the point of settlement.
The result is that the front office sees faster time to market with fewer hold-ups, the middle office sees fewer exceptions and faster communications, and the back office benefits from higher settlement efficiency and reduced risk.
This alignment not only saves time 鈥� it strengthens client relationships and preserves P&L integrity.
Regulation and risk: A built-in compliance advantage
With T+1 settlement in North America and a heightened Central 网爆吃瓜 Depositories Regulation (CSDR) enforcement in Europe, the operational stakes have never been higher. Under these regimes, delays translate directly to penalties.
By digitising and automating the processes underpinning settlement readiness, Saphyre builds compliance resilience into operations.
Every data change is logged, every document version-controlled, and every counterparty status auditable in real time 鈥� giving compliance teams a defensible audit trail and fewer surprises.
Beyond efficiency: Redefining client experience
Saphyre鈥檚 value is not just operational 鈥� it is experiential.
In securities finance, the ability to onboard counterparties swiftly, share data seamlessly, and maintain transparency has become a key differentiator. Firms using Saphyre report improved client satisfaction. What once required dozens of email exchanges now feels digital, streamlined, and professional 鈥� a major advantage when product margins are thin and relationships drive value.
鈥淚t鈥檚 not just about automation,鈥� says Stephen Roche, president and co-founder of Saphyre. 鈥淚t鈥檚 about enabling collaboration across institutions that historically operated in silos. We鈥檙e creating an environment where counterparties can trust the data they share 鈥� and trade with confidence.鈥�
The strategic shift: From cost centre to alpha enabler
Historically, operations and technology functions have been viewed as cost centres 鈥� essential but not revenue-generating. Saphyre flips that narrative. By accelerating readiness and reducing friction, firms can capture opportunities sooner and deploy balance sheet capacity more efficiently.
For securities lending desks, that means faster onboardings, greater borrower responsiveness, and quicker settlements. Operational excellence becomes a new form of alpha generation 鈥� driven by speed, certainty, and data integrity.
A platform built for what鈥檚 next
Saphyre鈥檚 momentum has not gone unnoticed. The firm has received multiple innovation awards and established partnerships with leading global institutions. Its technology 鈥� protected by over 108 patents 鈥� underscores the proprietary nature of its approach. But perhaps its greatest success lies in transforming industry mindset: proving that operational transformation is both achievable and profitable.
As T+1 expands globally and digital assets enter mainstream collateral pools, the complexity of operational interdependencies will grow. Firms clinging to manual workflows will fall behind. Saphyre is positioning itself as the operating system for readiness 鈥� the invisible layer ensuring every trade, fund, and counterparty is aligned before risk ever enters the market.
Conclusion: From friction to flow
For years, the back office quietly absorbed the industry鈥檚 inefficiencies. But as the line between front and back blurs, the firms that thrive will be those that eliminate friction before it impacts trades.
Saphyre鈥檚 vision of pre-trade operational and compliance intelligence, SSI synchronisation, and AI-driven onboarding does not just streamline workflows 鈥� it redefines operational excellence.
As the industry faces shorter settlement windows, tighter margins, and rising transparency demands, the ability to be ready-to-trade or lend instantly will separate leaders from laggards.
Saphyre is not just automating old processes. It is building the digital market infrastructure for a future where counterparties collaborate in real time, data flows seamlessly, and securities finance finally moves at the speed of intent.
This includes delays in onboarding new counterparties, mismatched standing settlement instructions (SSIs), endless legal agreement amendments with details like pledge eligibility, and post-trade reconciliations that spiral into costly operational fire drills.
Despite sweeping digitisation elsewhere in capital markets, the underlying fabric of securities finance operations has not evolved enough. The result? Persistent trade fails, ballooning operational overhead, and lost time-to-market for lending desks already facing thinner spreads and growing regulatory complexity.
Every market participant knows the symptoms. Fewer realise that the cure lies in moving the entire process forward in time 鈥� from reactive post-trade cleanups to pre-trade readiness.
That is the shift now being driven by Saphyre, a fintech that has a patented, AI-powered platform which is rapidly becoming the connective tissue for operational efficiency across the pre and post-trade lifecycle.
The cost of friction in a margin-compressed world
Ask any head of securities lending or operations what keeps them up at night, and you will hear a familiar refrain: operational drag.
When a new lending account is onboarded, it can take weeks 鈥� or longer 鈥� before it is fully 鈥榬eady-to-trade鈥�. Legal agreements must be exchanged, approved, and stored. Agent lending disclosure (ALD) must be aligned. SSIs need to be validated and synchronised across multiple parties and systems. Each step introduces risk and cost.
鈥淓very time you rely on email or spreadsheets to confirm data, you鈥檙e inviting latency,鈥� explains one global head of securities finance operations at a Tier-1 bank. 鈥淏y the time you discover a mismatch, it鈥檚 too late 鈥� the trade has failed, and the damage is done.鈥�
According to studies from the Association for Financial Markets in Europe (AFME) 鈥� 鈥楢FME & Euroclear Post-Trade Fail Analysis 2020鈥� 鈥� and the Depository Trust & Clearing Corporation (DTCC) 鈥� 鈥楧TCC Settlement Efficiency Forum Reports 2019-2021鈥� 鈥� between 30 and 40 per cent of settlement fails across securities markets can be traced back to reference data or settlement instruction errors. The cost of remediation 鈥� manual intervention, failed trade fees, and delayed collateral movements 鈥� adds up quickly. And that is before considering the opportunity cost: while counterparties untangle operational knots, trading desks lose alpha.
In a world where basis points are increasingly precious, operational friction becomes a silent tax on performance.
From post-trade to pre-trade: A paradigm shift
The industry鈥檚 traditional response has been to automate post-trade processes 鈥� exception management, reconciliation, and settlement. While those advances are valuable, it treats symptoms, not causes.
Saphyre鈥檚 approach turns that model on its head. Instead of waiting for trades to fail, Saphyre鈥檚 technology pre-validates and synchronises data and documentation before trading begins.
Its platform digitises onboarding documentation and SSIs, automates legal agreement amendments, and extracts, verifies, and maps data across counterparties and systems. Using patented AI and a shared network architecture, Saphyre ensures that both sides of a trade start with the same, validated information 鈥� creating a true 鈥榬eady-to-lend鈥� status before execution.
This shift 鈥� what Saphyre calls pre-trade intelligence 鈥� removes the bulk of downstream exceptions that have long plagued securities lending operations. As more firms join the network, the benefits compound. Once a counterparty鈥檚 data and documents are captured, validated, and stored in Saphyre, they can be reused across new funds, accounts, and transactions without repeating the onboarding process.
Each data element, such as an updated SSI or tax form, is automatically propagated in real time to all previously permissioned parties and their systems. In short: submit once, reuse infinitely.
The result is a continuously reconciled, cross-institution golden record of operational data. Because Saphyre integrates with major custodians, brokers, and buy side order management systems, this data does not live in isolation 鈥� it flows directly across front, middle, and back-office ecosystems.
Onboarding: From weeks to hours
Every new account or fund setup requires Know Your Customer (KYC) documentation, static data, and operational alignment across multiple parties 鈥� often handled via endless email chains. Large institutions can spend 20 to 30 business days onboarding a single new counterparty.
Saphyre鈥檚 AI Agent for Onboarding, launched earlier this year, changes that. Clients simply email documents or data files to the system, which automatically extracts, validates, and populates required fields. Missing items trigger intelligent follow-ups, and counterparties are notified when 鈥榬eady-to-trade鈥� status is achieved.
Early adopters reported that onboarding timelines had reduced by 75 per cent, freeing staff for higher-value work and enabling front-office desks to deploy capital faster.
The network effect: Data that gets smarter
Unlike traditional workflow tools, Saphyre functions as a shared network. Each new participant strengthens the ecosystem. Once an account is onboarded, validated information becomes instantly accessible (with permissions) to other counterparties within the network. This creates a positive network externality 鈥� the value of the system increases as more institutions connect.
Over 100 global financial institutions now use Saphyre鈥檚 platform, representing trillions in assets. The resulting data network enables proactive issue resolution, early discrepancy detection, and standardised operational alignment across markets and asset classes. It also delivers what the industry has long sought: a continuously updated view of counterparty readiness across the entire lifecycle.
Bridging the front, middle, and back office divide
网爆吃瓜 lending operations have traditionally been fragmented: the front office executes trades, the middle office validates them, and the back office settles them 鈥� often with limited data flow between systems. Saphyre鈥檚 market infrastructure bridges that divide.
By pushing accurate, validated operational data upstream, front offices know in advance whether a counterparty is ready-to-lend. Middle office teams gain visibility into data lineage and version control, while back offices rely on synchronised SSIs and legal parameters at the point of settlement.
The result is that the front office sees faster time to market with fewer hold-ups, the middle office sees fewer exceptions and faster communications, and the back office benefits from higher settlement efficiency and reduced risk.
This alignment not only saves time 鈥� it strengthens client relationships and preserves P&L integrity.
Regulation and risk: A built-in compliance advantage
With T+1 settlement in North America and a heightened Central 网爆吃瓜 Depositories Regulation (CSDR) enforcement in Europe, the operational stakes have never been higher. Under these regimes, delays translate directly to penalties.
By digitising and automating the processes underpinning settlement readiness, Saphyre builds compliance resilience into operations.
Every data change is logged, every document version-controlled, and every counterparty status auditable in real time 鈥� giving compliance teams a defensible audit trail and fewer surprises.
Beyond efficiency: Redefining client experience
Saphyre鈥檚 value is not just operational 鈥� it is experiential.
In securities finance, the ability to onboard counterparties swiftly, share data seamlessly, and maintain transparency has become a key differentiator. Firms using Saphyre report improved client satisfaction. What once required dozens of email exchanges now feels digital, streamlined, and professional 鈥� a major advantage when product margins are thin and relationships drive value.
鈥淚t鈥檚 not just about automation,鈥� says Stephen Roche, president and co-founder of Saphyre. 鈥淚t鈥檚 about enabling collaboration across institutions that historically operated in silos. We鈥檙e creating an environment where counterparties can trust the data they share 鈥� and trade with confidence.鈥�
The strategic shift: From cost centre to alpha enabler
Historically, operations and technology functions have been viewed as cost centres 鈥� essential but not revenue-generating. Saphyre flips that narrative. By accelerating readiness and reducing friction, firms can capture opportunities sooner and deploy balance sheet capacity more efficiently.
For securities lending desks, that means faster onboardings, greater borrower responsiveness, and quicker settlements. Operational excellence becomes a new form of alpha generation 鈥� driven by speed, certainty, and data integrity.
A platform built for what鈥檚 next
Saphyre鈥檚 momentum has not gone unnoticed. The firm has received multiple innovation awards and established partnerships with leading global institutions. Its technology 鈥� protected by over 108 patents 鈥� underscores the proprietary nature of its approach. But perhaps its greatest success lies in transforming industry mindset: proving that operational transformation is both achievable and profitable.
As T+1 expands globally and digital assets enter mainstream collateral pools, the complexity of operational interdependencies will grow. Firms clinging to manual workflows will fall behind. Saphyre is positioning itself as the operating system for readiness 鈥� the invisible layer ensuring every trade, fund, and counterparty is aligned before risk ever enters the market.
Conclusion: From friction to flow
For years, the back office quietly absorbed the industry鈥檚 inefficiencies. But as the line between front and back blurs, the firms that thrive will be those that eliminate friction before it impacts trades.
Saphyre鈥檚 vision of pre-trade operational and compliance intelligence, SSI synchronisation, and AI-driven onboarding does not just streamline workflows 鈥� it redefines operational excellence.
As the industry faces shorter settlement windows, tighter margins, and rising transparency demands, the ability to be ready-to-trade or lend instantly will separate leaders from laggards.
Saphyre is not just automating old processes. It is building the digital market infrastructure for a future where counterparties collaborate in real time, data flows seamlessly, and securities finance finally moves at the speed of intent.
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to 网爆吃瓜 Finance Times
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to 网爆吃瓜 Finance Times
