网爆吃瓜 Finance UK Symposium
14 October 2025
Industry experts gathered at One Great George Street in London to explore the trending topics, challenges, and movements in the securities finance space, from navigating cross-border compliance, to the agency lending evolution
Image: Andrew Davis
Back in London, market participants came together to attend the fourth 网爆吃瓜 Finance Symposium, where experts, practitioners, and visionaries shared their insights on the emerging challenges and opportunities within the securities finance space.
Hosted by Gabriele Frediani, head of development and market infrastructure coverage, Europe, at The Liquidity and Sustainability Facility, speakers reviewed the need for improved data, automation, innovation, and maintaining financial stability.
Market requires improved data and more oversight
The industry will face an increasing need for more data and oversight while clients look to expand their securities lending programme capabilities, according to panellists.
During the 鈥業ndependent Oversight in 网爆吃瓜 Lending: Governance, Monitoring, and Fiduciary Excellence' panel, participants reviewed the significance of governance, oversight, and due diligence within securities lending programmes.
Dan Rudd, executive director, Agency 网爆吃瓜 Finance at J.P. Morgan, laid the foundation for the session through his definition of oversight from an agent lender perspective.
鈥淥ur role is quite simple, we need to consult and we need to make oversight as easy as possible for our client base. It is quite a mature industry, so I believe that every agent lender should have everything in place that a client needs 鈥� and it鈥檚 just about establishing what that is.鈥�
He emphasised the importance of doing oversight, which once made easy for clients, firms can move on to discuss the performance of the programme.
Oversight is an outsource function and can include monitoring counterparties, liquidity, as well as the collateral that is accepted, Rudd noted.
网爆吃瓜 Lending is an outsource function and, as you can imagine, whatever a client is required to do for their oversight, the agent lenders will already be doing exactly the same thing, such as monitoring counterparties, limits, as well as the collateral that is accepted, to name a few. This is why performing due diligence on your providers is important to understand what they are already doing, Rudd noted.
According to Rob Nunn, director, senior product management at S&P Global Market Intelligence, the levels of oversight, from one side of the spectrum to the other, ranging from beneficial owners that do nothing, to those that do absolutely everything.
Nunn commented: 鈥淭he focus has moved away from performance. There is much more data and solutions being used to help them with their programmes, such as liquidity, risk management, and compliance.
鈥淭he larger asset managers have to look at the activity of securities lending in combination with other activities that they are managing internally in financing their securities. Ultimately, they are looking at 鈥榠s my agent doing a good job?鈥� and 99 per cent of the time, they are.鈥�
Leading the panel forward, moderator Sean O鈥橬eill, managing partner at O鈥橬eill & Associates, asked how firms are setting themselves up, and where the independence lies when it comes to oversight.
Setting the scene, Nunn indicated that data is provided by the market; there is a framework provided by the International 网爆吃瓜 Lending Association (ISLA) that covers three pillars: what data should be provided; how it should be aggregated; and how it should be used.
For the beneficial owners participating in securities lending, especially in regulated funds, there is guidance provided by the regulators, though there is no regulation as such.
Nunn said: 鈥淭he independent view uses the data provided by the market participants, to create an appropriate peer group and an appropriate benchmark, to ensure you are comparing apples with apples. It could be better, and we should review those standards. In addition, the data that we receive needs to be better as well.鈥�
Discussing whether liquidity management is or should be a part of governance, Rudd noted that in reality, 鈥渋t is something that we do internally, so we鈥檙e monitoring all aspects of liquidity, making sure we can get positions back in time鈥�. Rudd explained that firms need to have the oversight to pick up on potential issues: 鈥淭he whole point of oversight is trying to identify in the unlikely event there are any issues.鈥�
In terms of balancing operational oversight and performance, Nunn said: 鈥淚t has so many layers. Creating an oversight governance structure of the programme, including who approves which funds can participate in lending, firms need to have that oversight committee before you even start lending.鈥�
Speaking on governance, Rudd alluded: 鈥淗aving the right governance in place, being able to demonstrate it builds on that trust in the relationship that you have with clients. So that is going to help in terms of expanding programmes, working on slightly more strategic opportunities, for example, where there might be additional effort that's required.鈥�
Concluding the panel, Nunn says more regulation and oversight is 鈥渋nevitable鈥�, while Rudd believes there will be a 鈥渢hirst for more information鈥� to expand on the products clients can utilise with their existing securities lending model.
The regulatory landscape
The 鈥楪lobal Regulatory Convergence: Navigating Cross-Border Compliance鈥� panel saw participants discuss the most pressing and uncertain areas of the industry regarding global compliance.
The panel delved into the complexities and challenges of global regulatory convergence, focusing on 10c-1a, T+1, and reconciliation.
Ed Oliver, managing director, product development at eSecLending, began the discussion by talking about Rule 10c-1a, stating the delay in the timeline from January 2026 to September 2026 was 鈥済ood news鈥� for the industry, as it allows more time to prepare for the change.
The rule requires firms to report details of securities loans to a public database, so that regulators and the market can see what is being lent, to whom (anonymously), and on what terms, in an attempt to create greater transparency in the industry.
He then went on to detail how the US 网爆吃瓜 and Exchange Commission (SEC) has been requested to reconsider the rule in order to review its economic impact 鈥� this also applies to the short-selling rule 13f-2.
鈥淭he SEC chair acknowledged that, and said that his team is now evaluating the rules and coming up with the new recommendations for action, and that could lead to changes to the rules themselves, and acknowledged that it could also change compliance dates,鈥� Oliver stated.
Simon Waddington, head of Post-Trade and RegTech Solutions at EquiLend, further discussed 10c-1a, saying it has been on his agenda for a while. 鈥淥ur view in reading the verdict from the Fifth Circuit is that it鈥檚 not going to go away. It may be revised or the timeframe may be pushed out again slightly. I have a feeling we鈥檙e not going to be ignoring it for the next 12 months, maybe the next few months, but I think after that, we鈥檙e going to have to start taking it seriously again,鈥� he said.
Waddington also spoke about T+1 in Europe, saying it is a big focus for his clients regarding automation processes such as pre-matching, recalls, and returns.
He has already seen a huge increase in utilisation in some of the firm鈥檚 post-trade products, and expects that to continue as the implementation date draws nearer.
Regarding the date, he continued: 鈥淭here are still a few firms who are putting their heads in the sand a little bit given that it鈥檚 still two years away. Our view is that two years is not very long to get resources assigned, do the development, and implement.鈥�
Following events like the CrowdStrike patch that impacted numerous global firms, Waddington said the industry is focused on resiliency for critical functions, with examples being Agent Lender Disclosure (ALD) and the 网爆吃瓜 Financing Transactions Regulation (SFTR), which do not have processes that can be easily replicated manually if a provider 鈥済oes down鈥�. There are other functions that can be done manually, he added, or you can have other backup solutions, but those two are very difficult to replicate without an automated process.
Waddington said that EquiLend is focused on solutions they can offer in terms of internal resiliency, as well as resiliency as a backup provider.
Mark Steadman, head of report hub at Delta Capita, discussed potential challenges and what clients want from the industry, stating there is a need to provide solutions to technological challenges related to reporting.
鈥淐lients just don鈥檛 want to deal with trading reporting at all and if they can outsource it to a credible supplier they will. So the opportunity there for us is really good, bringing leading trade reporting technology into the wider Delta Capita managed service offering to enable us to provide a complete end-to-end service offering,鈥� he explained.
Regarding 10c-1a, Waddington stated: 鈥淲e鈥檙e going to spend several million dollars implementing a 10c-1a reporting solution for our clients and we have around 120 clients who use our post-trade and regulatory services.
鈥淚f each of those clients spend just a million dollars on developing what they need for 10c-1a, that鈥檚 US$120 million, and that鈥檚 just for EquiLend鈥檚 client base. This is one of the drivers behind ESMA鈥檚 call for evidence on SFTR, the European Market Infrastructure Regulation, and the Markets in Financial Instruments Regulation 鈥� they recognise that this is a huge cost to the industry.鈥�
The call for evidence by the European 网爆吃瓜 and Markets Authority (ESMA) on simplifying financial transaction reporting was a key topic of discussion for the panellists, as it aims to reduce costs by 25-35 per cent.
When trying to reduce costs in the industry, data standardisation, duplication of reporting including dual-side reporting, inconsistency across the data fields that are reported, and different reporting channels, are all current challenges. Steadman added that ESMA has come up with ways to attempt to reduce said reporting costs.
Steadman went on to detail these proposed methods of reduction, explaining: 鈥淥ption one being removal of the duplications, which is the lighter of the two. They have split that into 1a and 1b. Option 1a is to remove the duplication of ETDs and OTCs across EMIR and MiFIR, and option 1b, is to remove duplication of post-trade events.
鈥淥ption two, which is the more radical, is the report once principle, which means a common reporting framework, reports and templates across SFTR, MiFIR, and EMIR. The timeline is five to seven years. Both these options will have to go through level one text as they are structural changes to the regulation.鈥�
Implementation costs of reporting infrastructure is another issue, according to panellists, as technological improvements are key to getting the 25-35 per cent reduction in costs.
In addition to technology, Steadman stated that the 鈥渙bvious鈥� way of reducing costs is to remove dual-side reporting.
The panellists went on to discuss reconciliation, noting it is fundamental to operational success, and it has developed over time to provide benefits to the regulatory reporting side.
Oliver commented that despite not getting much attention, reconciliation is essential for the smooth running of operations, however, the challenge now comes from working across different regions: the Middle East and Asia have their own rules and systems, which makes matching and reconciling trades more complicated. So while the basic process is strong, the growing differences between markets are creating new layers of complexity and risk.
Bringing the discussion back to T+1, Waddington noted that the automation of standard settlement instructions (SSIs) will be critical once the faster settlement framework has been implemented, something EquiLend is focused on, having moved over to the brand new repository with SSImple.
The panel concluded that technological advancements are crucial to bringing down reporting costs, that reconciliation across the growing markets is key, and reiterated the importance of staying informed about regulatory changes while preparing for what the future has in store.
Transforming securities finance operations
The securities finance industry must embrace automation, enhance operational efficiency, and align across jurisdictions to ensure readiness for the transition to T+1 settlement in October 2027, according to panellists.
The session, 鈥楾+1 Settlement: Transforming 网爆吃瓜 Finance Operations鈥�, brought together UK Accelerated Settlement Taskforce鈥檚 Ben Johnson, EquiLend鈥檚 Gabi Mantle, Karan Kapoor from Delta Capita, chair of the T+1 Task Force Andrew Douglas, Citi鈥檚 Victoria Bright, and Tony Holland from the International 网爆吃瓜 Lending Association (ISLA).
Opening the discussion, Douglas emphasised that the move to T+1 is no longer optional. He said: 鈥淭here is a mandate. HM Treasury will publish a statutory instrument which will amend UK Central 网爆吃瓜 Depositories Regulation (CSDR) and require that, from 11 October 2027, trades must settle on a T+1 basis. What鈥檚 not mandated is how you achieve it.鈥�
He noted that urgency is critical, with six months of the original 2.5-year runway already elapsed. Yet, some industry participants are still underestimating the shift. 鈥淚 sometimes do a poll at conferences where one of the options is, 鈥業t鈥檚 all a hoax, I don鈥檛 have to do anything鈥�. Someone once actually chose that,鈥� he noted, warning that the mandate is very real.
A key concern for market participants has been whether the UK, EU, and Switzerland would diverge on implementation. Douglas confirmed that all three jurisdictions have committed to move on the same date.
鈥淭he reports published so far are very similar. For example, automation of standard settlement instructions is a recommendation in the UK, EU, and Swiss reports. We are also coordinating test plans across jurisdictions, while there are structural differences 鈥� for example the UK has one CSD and Europe has 32 which will require bespoke plans 鈥� we are working toward a common test plan where possible,鈥� he explained.
Bright stressed the importance of preparedness across the trade lifecycle: 鈥淚t鈥檚 not just shortening settlement from two days to one. It impacts every part of the process 鈥� from trade execution and knowing where your stock is, through to corporate actions and post-trade. Firms need to analyse their processes end-to-end, identify pain points, and ensure vendors and every link in the chain are aligned.鈥�
Holland added that recommendations must be taken seriously, saying: 鈥淚f they have not already, firms need to read the recommendations, and read them soon. They鈥檙e not going to change. The 鈥榩laybook鈥� is about implementation, not altering deadlines or requirements.鈥�
He also urged firms to engage with UK and EU securities finance working groups, noting that new task forces have been established to address issues such as partials, shaping, batch processes, and SSIs.
On the trading side, Mantle highlighted the need for accuracy: 鈥淏y nature, securities financing transactions are reactive. Accuracy is critical, and in a T+1 world there won鈥檛 be the luxury of time to fix errors. The mindset has to shift: get it right the first time, ensuring fund setups, hierarchies, and SSIs are correct upfront.鈥�
Kapoor reinforced this point: 鈥淚t has to be front-to-back. In the past, people said, 鈥榯hat鈥檚 the back office鈥檚 problem鈥�. Not anymore. Front office teams need to trade with settlement in mind. Manual processes and email allocations won鈥檛 cut it.鈥�
For collateral, Mantle explained that mobilisation will be vital, particularly for intraday borrowing, and that reconciliations must be accurate to prevent collateral being tied up unnecessarily.
Holland noted that pragmatic approaches will help. 鈥淚f a lender asks for 100 in collateral and the borrower only has 60, best practice is for the lender to release 60 of the loan rather than nothing. The tools are there today to allow this to happen 鈥� it鈥檚 about keeping liquidity moving.鈥�
Automation and data quality emerged as central themes. Bright pointed to SSIs as a particular priority: 鈥淎utomating SSI processes is critical. Manual fixes like adding fields or changing codes at the last minute won鈥檛 work under T+1. Custodians can only do so much 鈥� clients need to get instructions to custodians in the right format and on time.鈥�
Douglas warned that T+1 is not the end point: 鈥淪ettlement will only get faster. Automation done today is preparation for T+0 or even instantaneous settlement in the future.鈥�
Mantle added that automation needs to be holistic: 鈥淚t鈥檚 not just about following recommendations. The whole lifecycle must stay aligned. Tools exist, but adoption is uneven 鈥� for example, many firms still send recall notices by email and call that automation. We need industry-wide collaboration.鈥�
Holland underscored the cost of inaction: 鈥淚n Europe, firms collectively lose 鈧�70 million a month in CSDR penalties around failed trades 鈥� 鈧�840 million a year. Industry tools exist to help reduce this, but adoption remains uneven. Without automation, firms will struggle.鈥�
Bright also noted that Switzerland, while outside the scope of CSDR, has benefited from the UK and EU reports, with its self-regulated approach already confirming that securities finance transactions (SFTs) will be exempt.
Concluding, Douglas said that alignment across the UK, EU, and Switzerland was 鈥渆xactly what we set out to achieve from the start, and it鈥檚 encouraging to see it taking shape鈥�.
Automation, digitalisation, and interoperability
In the 鈥楻ewiring Repo: Front-to-Back Automation in a Real-Time Market鈥� panel, panellists explored how comprehensive front-to-back automation is reshaping repo trading, processing, and management across the entire workflow.
The panel was moderated by Roy Zimmerhansl, head of capital markets at WTS Hansuke, who began the discussion by asking Thomas Williams, head of solutions trading and structuring at Schroders, his thoughts and experiences with repo transactions.
鈥淲ithout the repo market, you would not have a gilt market, and you would not have through that, all sorts of goods and services that we all rely on,鈥� Williams began.
鈥淚 see our usage of the repo market, whether as a cash giver or as a cash taker, as an enabler of other investment services that we鈥檙e providing. In most cases, we are buying portfolios of long-dated assets 鈥� bonds in particular 鈥� and financing those using repo to hedge the balance sheet risk of an insurance company or pension scheme.
鈥淥n a day-to-day basis, I am not using repo for one single client, but across scores of different clients. Each of these will have their own mandate restrictions, asset allocations, and operational third parties I need to communicate with. In that multi-portfolio model, we need as much automation and standardisation as we can get.鈥�
The panellists agreed on the importance of standardisation, collaboration, and technological advancements to address the challenges posed in the repo market, as well as enhance the overall market functionality.
It appears to be inevitable that companies that currently conduct securities trading will move to joining the repo market to assist with funding needs, which will arise with the introduction of T+1, with Crowther stating he feels as though the move will speed up over the next 12 months to provide holistic financing solutions.
Intraday trading was mentioned frequently, with David Le Guern, head of FIF & 网爆吃瓜 Middle Office at J.P. Morgan, highlighting that the International Capital Market Association (ICMA) data suggests intraday repo could triple among institutions.
In order to have a quick and accurate way to enhance the utilisation of funds by moving cash from place to place, there needs to be a framework that allows it. Le Guern explained that J.P. Morgan and other major institutions frequently move cash within their organisations to account for various legal entity structures. This process can be handled using traditional methods or through automated digital repo solutions, which have recently been piloted.
The importance of intraday trading was reiterated both by Zimmerhansl and Le Guern, with Zimmerhansl stating it is cash that greases the wheels of all transactions.
Le Guern, elaborating further on why same-day transactions are especially vital, said: 鈥淚f an asset must be delivered to a client from one legal entity, and that delivery relies on several internal transfers, your existing credit line is temporarily affected, which could impact other transactions. This issue would be resolved if all related transfers occurred simultaneously.鈥�
Neelan Pavan, technical product manager at MarketAxess, went on to discuss challenges raised by customers in the repo market, stating that the most pressing question is how to get data out in the most efficient manner.
鈥淚t鈥檚 not just about accessing data 鈥� it鈥檚 about ensuring the quality and consistency of that data. On the sell side, competing project priorities often get in the way, and real progress requires seamless alignment between the front office and back office.鈥�
Pavan highlighted the 鈥渟ignificant鈥� increase in matched volumes, stating there are three key drivers for the growth: 鈥淭he buy side is demanding automation from its executing brokers, regulation such as T+1 and US Treasury central clearing, and finally there is an increasing need to manage the complexities of lifecycle events.
鈥淭hey want those processes simplified and automated with the sell side counterparties they rely on. Once the buy side achieves that automation, it stops being optional. It then becomes the standard, and they鈥檙e putting real pressure on the sell side to deliver the level of automation that鈥檚 now a prerequisite for doing business.鈥�
Zimmerhansl reiterated that automation is now crucial to being in the business, emphasising the need to offer effective solutions to customers.
Crowther was able to speak on the buy side and sell side perspective, stating: 鈥淲here we see challenges in interoperability is in the front office to connect to all of the various trading platforms, some mature, some new, and being able to support their trade lifecycle all the way through.鈥�
Williams echoed the importance of cohesion and interoperability, saying: 鈥淚t鈥檚 so important that the framework and system works together to provide good data, reliable and reachable third parties, good tech, and no trade failures.鈥�
One of the main challenges in repo seen by Julien Berge, head of fixed income and repo at CACEIS, is thinking outside of the box: 鈥淭he repo market is mature, which makes it essential to think beyond local optimisation. While technology has arrived, most blockchain and innovation projects are still proprietary, which fragments the market even more. Without interoperability and standardisation, we risk missing the real opportunity: to create a more connected, efficient and resilient ecosystem.鈥�
When discussing technological advancements in the industry, Crowther agreed with Williams 鈥� that the technology is available, but accessing it is another issue. To fund it, firms will have to reallocate budgets, it will take time to roll out the new technology to clients, and larger, multi-market organisations.
While the technology and frameworks are all there, the panel concluded that the need for automation, digitalisation, and interoperability to improve efficiency and reduce costs is high, in order to enhance overall market functionality. It is not about whether the technology exists to meet buy side and sell side needs 鈥� the challenge is adoption.
Maintaining financial stability
As global financial markets navigate persistent and heightened volatility, steered by macroeconomic, geopolitical, and structural factors, resilient processing capabilities are key to maintaining financial stability, according to panellists.
Speaking at the 鈥楻isk Management and Collateral Optimisation in Volatile Markets鈥� panel, Sabine Farhat, head of securities finance product management at Murex, said real-time data processing and automation are key during volatile periods, where there is increased frequency and volume of margin calls, and larger collateral movements.
Farhat said Murex has 鈥渁dded a feature with functionality in the exposure inventory to make sure clients are capable of switching on to real-time market data and intraday margin in an automated way, because fast is critical to surviving a crisis鈥�.
Farhat noted that during Covid, over 140 billion margin calls occurred within a week, highlighting that being first to transfer large amounts is a key advantage when timing is everything.
Farhat explained that tokenising collateral can enhance efficiency in situations where physically transferring assets is challenging, while also supporting more effective stress testing and risk management.
A lack of visibility and mobility of assets across silos presents a challenge for optimisation, according to Sam Edwards, head of collateral for EMEA and APAC, and Global Triparty Services at State Street.
Edwards stressed the importance of improving visibility of inventory, and focusing on interoperability at an early stage to enable optimal liability management.
He said: 鈥淲hile we can talk about all the wonderful ways in which we can shave half a basis point off the cost, a lot of the challenge is how we can best mobilise assets for cross product requirements. That's particularly relevant as we build out new infrastructure, avoiding re-building those legacy silos that we have worked so hard to bridge.
鈥淔or a number of clients, getting that central view of your inventory is still a key focus that enables you to reduce your business鈥� cash usage, and reduce overall capital requirements. So as we build again in the digital world, and drive the tokenisation efforts to bring greater efficiency to our industry, the key is to focus on how we mobilise assets and increase the scope of assets in use for collateral and margin management.鈥�
Regulatory requirements like the Liquidity Coverage Ratio (LCR) demand holding high-quality liquid assets (HQLA), even under stressed environments, but market volatility often dries up liquidity, making compliance more difficult.
Andy Crockford, director of collateral management and funding at Scotiabank, emphasised that the ability to be malleable is essential to ensure you do not fall short of the legal requirements during a crisis.
Crockford said numerous challenges currently exist on the regulatory side, and firms need to ensure they get the right side of the metrics at all times, regardless of what the market is doing.
He says the ability to adjust your trading strategies, and the way you manage and optimise collateral can lead companies in different directions.
Crockford commented: 鈥淭here may be times when you're looking to point certain currencies of collateral to certain trades to achieve a certain purpose. And other times, when there's lots of talk about the relative ratings of the government bond market, where trading strategies may change and adapt as well. It's really the ability to adapt and be nimble and to get all of your systems working, to solve as many of these things as you can.鈥�
Asma Belgaied Hassine, product deputy director at Vermeg, noted that the company is increasingly investing in automation to reduce manual processes, which, she believes, goes beyond efficiency as it builds resilience and shock-absorption capabilities.
She added that the firm is using AI to digitise collateral agreements, especially eligibility matrices, therefore automating the entire process from the agreement onboarding, to margin call calculation, to collateral allocation and settlement.
Belgaied Hassine pointed to straight-through processing (STP) as the goal, meaning no human touchpoints from start to finish.
She said they are also investing in interoperability and higher connectivity between systems internally, with triparty agents and with the global collateral ecosystem, to move from siloed to connected through APIs for seamless connectivity.
The panel reiterated that a holistic, technology-driven approach to risk management and collateral optimisation can deliver better quantifiable benefits to endure instability, leading to improved transparency and less blockages in the system.
The future belongs to those who innovate
The industry is facing an increased demand from clients for advanced technology solutions such as AI and tokenisation, as well as enhanced data, following a lack of equivalency, according to panellists.
Speakers on the 鈥楢gent Lending Evolution: Technology, Innovation, and Competitive Differentiation鈥� session explored the impact of advanced technology on securities lending front-to-back solutions, enhanced connectivity through API integrated strategies, and the growing importance of data analytics in client reporting.
Patrick McManus, head of securities lending product at HSBC, opened the discussion with his thoughts on the agency lending world and what he is seeing from clients.
鈥淚t鈥檚 clear that there is a lot of demand for increased data and transparency. In the agency lending world, that primarily comes from our clients,鈥� he explained. 鈥淎s an industry, in agency lending, there has been a lack of equivalency in terms of the technology and the data we鈥檝e had in terms of our products.鈥�
From a HSBC perspective, McManus said there is a larger demand from clients today, particularly around producing data 鈥渋n the same way that other functions and businesses that operate do鈥�.
In other words, this means 鈥済etting data delivered in real time, or at least in a fashion in which they can incorporate into their systems鈥�.
Ernst Dolce, CEO and co-founder of Banqora, highlighted that technology should not be viewed merely as a means to improve the lenders鈥� internal infrastructure, reduce costs or increase efficiency. The real focus, he noted, is on how technology delivers outcomes for clients. He explained that when founding the company with co-founder Nicholas Holden, 鈥渉ow our initial priority was helping clients achieve higher returns safely 鈥� through real-time insights, better risk management, reduced counterparty risk, and greater operational efficiency. We leverage data to help our clients make better decisions鈥�.
Continuing the conversation, Fiona Adams, head of global product development for securities finance at BNY, explored the significance of efficiency. While it can help to reduce cost, for firms it goes beyond this. 鈥淗ow do we become quicker to market the solutions that we are delivering? Data becomes key to that.
鈥淗ow do we actually unlock the data? We're in a fortunate position where we have a lot of clients sharing data with us. How do we actually capitalise on that data and then make better, faster decisions?鈥�
According to Jim Aris, executive director and head of international equity lending for Global 网爆吃瓜 Lending Solutions (GSLS) at MUFG, sometimes it is important to take a minute and look back through history and remember where we all were, to appreciate and see how far firms and technology have come today.
He added: 鈥淲here we were from a securities lending and repo market aspect three decades ago, in terms of volumes, liquidity, transparency, how people price, trade, and report securities 鈥� has fundamentally changed.
鈥淥f course, there are still certain drivers and there are key aspects, but there are significant changes across the use and volume of data. For example, the integrity and analysis of this data and how it鈥檚 used for price discovery, trading, and risk assessment. AI has the potential, to help meet industry expectations around faster more efficient decision making processes across every aspect of the business.鈥�
For Aris, it is not just trading, there remain bottle necks across various parts of the industry where technology, and especially AI, will be useful. For example, MUFG has negotiated a number of fresh legal documents over the past five years but even at this first early stage there are elements that can be improved to speed up the process.
He noted: 鈥淭here remains scope for tech to streamline and provide efficiencies and help refine every aspect of the business. Starting from the legal stage all the way through to facets such as availability and demand forecasting, collateral optimisation, exception management and of course reporting. There really are so many areas that will and are already benefitting from innovation.鈥�
In order for firms to prepare for the future, and to reach their goals in the next five years, strategy is key to working out the 鈥渂ig steps鈥� one will need to take.
Adams indicated: 鈥淲e do have some of those components in our stack today, and we've managed to accommodate them well. But you know, in 10 years time, am I still going to be able to accommodate those components, or do I need to take action now?
鈥淲e've recently developed quite a robust prioritisation framework to try and put some science around that and help us to make better decisions.鈥�
Leading the panel was Gabriele Frediani, head of development and market infrastructure coverage, Europe, at The Liquidity and Sustainability Facility (LSF).
He moved the discussion to focus on the numerous banks and technology providers in the securities finance world 鈥� asking if there was room for so many entities in this space.
For Aris, having multiple fintechs in the market is 鈥渇antastic鈥� as it provides competition. He added: 鈥淲hen we talk about innovation and tech, it鈥檚 going to move extremely fast over the next few years and it鈥檚 very exciting what the future might hold.鈥� But he highlighted the need to be cautious and ensure there is a balance between being a first mover and being a smart adopter, ensuring 鈥渢ech spend is in the right area at the right time to benefit clients鈥�.
In technology, jumping in too early can leave you with systems or items that become outdated very quickly, he added. As an example, Aris gave a comparison to the car world. He indicated that the first wave of electric cars looked advanced at the time but cannot compete with what is available on the road right now.
The product is changing so fast that each generation is fundamentally different from the previous, providing improved agility, range, battery capacity, and shorter charging times.
He concluded: 鈥淥ld electric cars are probably a great second hand buy, but early, original adopters took the hit on price as well as outdated tech. With how quickly the technology has advanced you really want the latest generation.鈥� Jumping on every piece of new technology however can be costly and short lived but waiting too long might mean missing opportunities.
So, there must be a balance between innovation, price, and smart adoption to ensure technology is proven, scalable, and fits long term needs of a business. 鈥淏enefitting from years of experience, we continue to learn and of course refine business, products, and technology,鈥� he stated.
MUFG believes that having multiple fintech providers in the market is essential. It helps to drive competition, innovation, and fundamentally gives firms a real choice in how they build solutions, which is 鈥渦ltimately what keeps the industry moving forward and keeps it an exciting market to be involved in鈥�.
网爆吃瓜 Lending is in a transformation phase and automation and AI will keep taking on routine daily tasks, the panel heard. But for MUFG, technology helps to support business and ensures the firm can continue to spend time to nurture long lasting relationships with clients and counterparts that continue to remain a key part of this industry.
According to Adams, the future belongs to people who innovate, and not to those who simply see it as a cost-reducing exercise. 鈥淚 see it as bringing value to our clients, the market, and the industry. People who stand still today will be left behind.鈥�
She also pinpointed that critical to moving forward is interconnectivity in the ecosystem. Adams concluded: 鈥淚f we all move to DLT blockchain, a handful of participants can't do that alone, and for it to work, it's that network effect that will really bring benefits. People who move will be part of that future state."
Hosted by Gabriele Frediani, head of development and market infrastructure coverage, Europe, at The Liquidity and Sustainability Facility, speakers reviewed the need for improved data, automation, innovation, and maintaining financial stability.
Market requires improved data and more oversight
The industry will face an increasing need for more data and oversight while clients look to expand their securities lending programme capabilities, according to panellists.
During the 鈥業ndependent Oversight in 网爆吃瓜 Lending: Governance, Monitoring, and Fiduciary Excellence' panel, participants reviewed the significance of governance, oversight, and due diligence within securities lending programmes.
Dan Rudd, executive director, Agency 网爆吃瓜 Finance at J.P. Morgan, laid the foundation for the session through his definition of oversight from an agent lender perspective.
鈥淥ur role is quite simple, we need to consult and we need to make oversight as easy as possible for our client base. It is quite a mature industry, so I believe that every agent lender should have everything in place that a client needs 鈥� and it鈥檚 just about establishing what that is.鈥�
He emphasised the importance of doing oversight, which once made easy for clients, firms can move on to discuss the performance of the programme.
Oversight is an outsource function and can include monitoring counterparties, liquidity, as well as the collateral that is accepted, Rudd noted.
网爆吃瓜 Lending is an outsource function and, as you can imagine, whatever a client is required to do for their oversight, the agent lenders will already be doing exactly the same thing, such as monitoring counterparties, limits, as well as the collateral that is accepted, to name a few. This is why performing due diligence on your providers is important to understand what they are already doing, Rudd noted.
According to Rob Nunn, director, senior product management at S&P Global Market Intelligence, the levels of oversight, from one side of the spectrum to the other, ranging from beneficial owners that do nothing, to those that do absolutely everything.
Nunn commented: 鈥淭he focus has moved away from performance. There is much more data and solutions being used to help them with their programmes, such as liquidity, risk management, and compliance.
鈥淭he larger asset managers have to look at the activity of securities lending in combination with other activities that they are managing internally in financing their securities. Ultimately, they are looking at 鈥榠s my agent doing a good job?鈥� and 99 per cent of the time, they are.鈥�
Leading the panel forward, moderator Sean O鈥橬eill, managing partner at O鈥橬eill & Associates, asked how firms are setting themselves up, and where the independence lies when it comes to oversight.
Setting the scene, Nunn indicated that data is provided by the market; there is a framework provided by the International 网爆吃瓜 Lending Association (ISLA) that covers three pillars: what data should be provided; how it should be aggregated; and how it should be used.
For the beneficial owners participating in securities lending, especially in regulated funds, there is guidance provided by the regulators, though there is no regulation as such.
Nunn said: 鈥淭he independent view uses the data provided by the market participants, to create an appropriate peer group and an appropriate benchmark, to ensure you are comparing apples with apples. It could be better, and we should review those standards. In addition, the data that we receive needs to be better as well.鈥�
Discussing whether liquidity management is or should be a part of governance, Rudd noted that in reality, 鈥渋t is something that we do internally, so we鈥檙e monitoring all aspects of liquidity, making sure we can get positions back in time鈥�. Rudd explained that firms need to have the oversight to pick up on potential issues: 鈥淭he whole point of oversight is trying to identify in the unlikely event there are any issues.鈥�
In terms of balancing operational oversight and performance, Nunn said: 鈥淚t has so many layers. Creating an oversight governance structure of the programme, including who approves which funds can participate in lending, firms need to have that oversight committee before you even start lending.鈥�
Speaking on governance, Rudd alluded: 鈥淗aving the right governance in place, being able to demonstrate it builds on that trust in the relationship that you have with clients. So that is going to help in terms of expanding programmes, working on slightly more strategic opportunities, for example, where there might be additional effort that's required.鈥�
Concluding the panel, Nunn says more regulation and oversight is 鈥渋nevitable鈥�, while Rudd believes there will be a 鈥渢hirst for more information鈥� to expand on the products clients can utilise with their existing securities lending model.
The regulatory landscape
The 鈥楪lobal Regulatory Convergence: Navigating Cross-Border Compliance鈥� panel saw participants discuss the most pressing and uncertain areas of the industry regarding global compliance.
The panel delved into the complexities and challenges of global regulatory convergence, focusing on 10c-1a, T+1, and reconciliation.
Ed Oliver, managing director, product development at eSecLending, began the discussion by talking about Rule 10c-1a, stating the delay in the timeline from January 2026 to September 2026 was 鈥済ood news鈥� for the industry, as it allows more time to prepare for the change.
The rule requires firms to report details of securities loans to a public database, so that regulators and the market can see what is being lent, to whom (anonymously), and on what terms, in an attempt to create greater transparency in the industry.
He then went on to detail how the US 网爆吃瓜 and Exchange Commission (SEC) has been requested to reconsider the rule in order to review its economic impact 鈥� this also applies to the short-selling rule 13f-2.
鈥淭he SEC chair acknowledged that, and said that his team is now evaluating the rules and coming up with the new recommendations for action, and that could lead to changes to the rules themselves, and acknowledged that it could also change compliance dates,鈥� Oliver stated.
Simon Waddington, head of Post-Trade and RegTech Solutions at EquiLend, further discussed 10c-1a, saying it has been on his agenda for a while. 鈥淥ur view in reading the verdict from the Fifth Circuit is that it鈥檚 not going to go away. It may be revised or the timeframe may be pushed out again slightly. I have a feeling we鈥檙e not going to be ignoring it for the next 12 months, maybe the next few months, but I think after that, we鈥檙e going to have to start taking it seriously again,鈥� he said.
Waddington also spoke about T+1 in Europe, saying it is a big focus for his clients regarding automation processes such as pre-matching, recalls, and returns.
He has already seen a huge increase in utilisation in some of the firm鈥檚 post-trade products, and expects that to continue as the implementation date draws nearer.
Regarding the date, he continued: 鈥淭here are still a few firms who are putting their heads in the sand a little bit given that it鈥檚 still two years away. Our view is that two years is not very long to get resources assigned, do the development, and implement.鈥�
Following events like the CrowdStrike patch that impacted numerous global firms, Waddington said the industry is focused on resiliency for critical functions, with examples being Agent Lender Disclosure (ALD) and the 网爆吃瓜 Financing Transactions Regulation (SFTR), which do not have processes that can be easily replicated manually if a provider 鈥済oes down鈥�. There are other functions that can be done manually, he added, or you can have other backup solutions, but those two are very difficult to replicate without an automated process.
Waddington said that EquiLend is focused on solutions they can offer in terms of internal resiliency, as well as resiliency as a backup provider.
Mark Steadman, head of report hub at Delta Capita, discussed potential challenges and what clients want from the industry, stating there is a need to provide solutions to technological challenges related to reporting.
鈥淐lients just don鈥檛 want to deal with trading reporting at all and if they can outsource it to a credible supplier they will. So the opportunity there for us is really good, bringing leading trade reporting technology into the wider Delta Capita managed service offering to enable us to provide a complete end-to-end service offering,鈥� he explained.
Regarding 10c-1a, Waddington stated: 鈥淲e鈥檙e going to spend several million dollars implementing a 10c-1a reporting solution for our clients and we have around 120 clients who use our post-trade and regulatory services.
鈥淚f each of those clients spend just a million dollars on developing what they need for 10c-1a, that鈥檚 US$120 million, and that鈥檚 just for EquiLend鈥檚 client base. This is one of the drivers behind ESMA鈥檚 call for evidence on SFTR, the European Market Infrastructure Regulation, and the Markets in Financial Instruments Regulation 鈥� they recognise that this is a huge cost to the industry.鈥�
The call for evidence by the European 网爆吃瓜 and Markets Authority (ESMA) on simplifying financial transaction reporting was a key topic of discussion for the panellists, as it aims to reduce costs by 25-35 per cent.
When trying to reduce costs in the industry, data standardisation, duplication of reporting including dual-side reporting, inconsistency across the data fields that are reported, and different reporting channels, are all current challenges. Steadman added that ESMA has come up with ways to attempt to reduce said reporting costs.
Steadman went on to detail these proposed methods of reduction, explaining: 鈥淥ption one being removal of the duplications, which is the lighter of the two. They have split that into 1a and 1b. Option 1a is to remove the duplication of ETDs and OTCs across EMIR and MiFIR, and option 1b, is to remove duplication of post-trade events.
鈥淥ption two, which is the more radical, is the report once principle, which means a common reporting framework, reports and templates across SFTR, MiFIR, and EMIR. The timeline is five to seven years. Both these options will have to go through level one text as they are structural changes to the regulation.鈥�
Implementation costs of reporting infrastructure is another issue, according to panellists, as technological improvements are key to getting the 25-35 per cent reduction in costs.
In addition to technology, Steadman stated that the 鈥渙bvious鈥� way of reducing costs is to remove dual-side reporting.
The panellists went on to discuss reconciliation, noting it is fundamental to operational success, and it has developed over time to provide benefits to the regulatory reporting side.
Oliver commented that despite not getting much attention, reconciliation is essential for the smooth running of operations, however, the challenge now comes from working across different regions: the Middle East and Asia have their own rules and systems, which makes matching and reconciling trades more complicated. So while the basic process is strong, the growing differences between markets are creating new layers of complexity and risk.
Bringing the discussion back to T+1, Waddington noted that the automation of standard settlement instructions (SSIs) will be critical once the faster settlement framework has been implemented, something EquiLend is focused on, having moved over to the brand new repository with SSImple.
The panel concluded that technological advancements are crucial to bringing down reporting costs, that reconciliation across the growing markets is key, and reiterated the importance of staying informed about regulatory changes while preparing for what the future has in store.
Transforming securities finance operations
The securities finance industry must embrace automation, enhance operational efficiency, and align across jurisdictions to ensure readiness for the transition to T+1 settlement in October 2027, according to panellists.
The session, 鈥楾+1 Settlement: Transforming 网爆吃瓜 Finance Operations鈥�, brought together UK Accelerated Settlement Taskforce鈥檚 Ben Johnson, EquiLend鈥檚 Gabi Mantle, Karan Kapoor from Delta Capita, chair of the T+1 Task Force Andrew Douglas, Citi鈥檚 Victoria Bright, and Tony Holland from the International 网爆吃瓜 Lending Association (ISLA).
Opening the discussion, Douglas emphasised that the move to T+1 is no longer optional. He said: 鈥淭here is a mandate. HM Treasury will publish a statutory instrument which will amend UK Central 网爆吃瓜 Depositories Regulation (CSDR) and require that, from 11 October 2027, trades must settle on a T+1 basis. What鈥檚 not mandated is how you achieve it.鈥�
He noted that urgency is critical, with six months of the original 2.5-year runway already elapsed. Yet, some industry participants are still underestimating the shift. 鈥淚 sometimes do a poll at conferences where one of the options is, 鈥業t鈥檚 all a hoax, I don鈥檛 have to do anything鈥�. Someone once actually chose that,鈥� he noted, warning that the mandate is very real.
A key concern for market participants has been whether the UK, EU, and Switzerland would diverge on implementation. Douglas confirmed that all three jurisdictions have committed to move on the same date.
鈥淭he reports published so far are very similar. For example, automation of standard settlement instructions is a recommendation in the UK, EU, and Swiss reports. We are also coordinating test plans across jurisdictions, while there are structural differences 鈥� for example the UK has one CSD and Europe has 32 which will require bespoke plans 鈥� we are working toward a common test plan where possible,鈥� he explained.
Bright stressed the importance of preparedness across the trade lifecycle: 鈥淚t鈥檚 not just shortening settlement from two days to one. It impacts every part of the process 鈥� from trade execution and knowing where your stock is, through to corporate actions and post-trade. Firms need to analyse their processes end-to-end, identify pain points, and ensure vendors and every link in the chain are aligned.鈥�
Holland added that recommendations must be taken seriously, saying: 鈥淚f they have not already, firms need to read the recommendations, and read them soon. They鈥檙e not going to change. The 鈥榩laybook鈥� is about implementation, not altering deadlines or requirements.鈥�
He also urged firms to engage with UK and EU securities finance working groups, noting that new task forces have been established to address issues such as partials, shaping, batch processes, and SSIs.
On the trading side, Mantle highlighted the need for accuracy: 鈥淏y nature, securities financing transactions are reactive. Accuracy is critical, and in a T+1 world there won鈥檛 be the luxury of time to fix errors. The mindset has to shift: get it right the first time, ensuring fund setups, hierarchies, and SSIs are correct upfront.鈥�
Kapoor reinforced this point: 鈥淚t has to be front-to-back. In the past, people said, 鈥榯hat鈥檚 the back office鈥檚 problem鈥�. Not anymore. Front office teams need to trade with settlement in mind. Manual processes and email allocations won鈥檛 cut it.鈥�
For collateral, Mantle explained that mobilisation will be vital, particularly for intraday borrowing, and that reconciliations must be accurate to prevent collateral being tied up unnecessarily.
Holland noted that pragmatic approaches will help. 鈥淚f a lender asks for 100 in collateral and the borrower only has 60, best practice is for the lender to release 60 of the loan rather than nothing. The tools are there today to allow this to happen 鈥� it鈥檚 about keeping liquidity moving.鈥�
Automation and data quality emerged as central themes. Bright pointed to SSIs as a particular priority: 鈥淎utomating SSI processes is critical. Manual fixes like adding fields or changing codes at the last minute won鈥檛 work under T+1. Custodians can only do so much 鈥� clients need to get instructions to custodians in the right format and on time.鈥�
Douglas warned that T+1 is not the end point: 鈥淪ettlement will only get faster. Automation done today is preparation for T+0 or even instantaneous settlement in the future.鈥�
Mantle added that automation needs to be holistic: 鈥淚t鈥檚 not just about following recommendations. The whole lifecycle must stay aligned. Tools exist, but adoption is uneven 鈥� for example, many firms still send recall notices by email and call that automation. We need industry-wide collaboration.鈥�
Holland underscored the cost of inaction: 鈥淚n Europe, firms collectively lose 鈧�70 million a month in CSDR penalties around failed trades 鈥� 鈧�840 million a year. Industry tools exist to help reduce this, but adoption remains uneven. Without automation, firms will struggle.鈥�
Bright also noted that Switzerland, while outside the scope of CSDR, has benefited from the UK and EU reports, with its self-regulated approach already confirming that securities finance transactions (SFTs) will be exempt.
Concluding, Douglas said that alignment across the UK, EU, and Switzerland was 鈥渆xactly what we set out to achieve from the start, and it鈥檚 encouraging to see it taking shape鈥�.
Automation, digitalisation, and interoperability
In the 鈥楻ewiring Repo: Front-to-Back Automation in a Real-Time Market鈥� panel, panellists explored how comprehensive front-to-back automation is reshaping repo trading, processing, and management across the entire workflow.
The panel was moderated by Roy Zimmerhansl, head of capital markets at WTS Hansuke, who began the discussion by asking Thomas Williams, head of solutions trading and structuring at Schroders, his thoughts and experiences with repo transactions.
鈥淲ithout the repo market, you would not have a gilt market, and you would not have through that, all sorts of goods and services that we all rely on,鈥� Williams began.
鈥淚 see our usage of the repo market, whether as a cash giver or as a cash taker, as an enabler of other investment services that we鈥檙e providing. In most cases, we are buying portfolios of long-dated assets 鈥� bonds in particular 鈥� and financing those using repo to hedge the balance sheet risk of an insurance company or pension scheme.
鈥淥n a day-to-day basis, I am not using repo for one single client, but across scores of different clients. Each of these will have their own mandate restrictions, asset allocations, and operational third parties I need to communicate with. In that multi-portfolio model, we need as much automation and standardisation as we can get.鈥�
The panellists agreed on the importance of standardisation, collaboration, and technological advancements to address the challenges posed in the repo market, as well as enhance the overall market functionality.
It appears to be inevitable that companies that currently conduct securities trading will move to joining the repo market to assist with funding needs, which will arise with the introduction of T+1, with Crowther stating he feels as though the move will speed up over the next 12 months to provide holistic financing solutions.
Intraday trading was mentioned frequently, with David Le Guern, head of FIF & 网爆吃瓜 Middle Office at J.P. Morgan, highlighting that the International Capital Market Association (ICMA) data suggests intraday repo could triple among institutions.
In order to have a quick and accurate way to enhance the utilisation of funds by moving cash from place to place, there needs to be a framework that allows it. Le Guern explained that J.P. Morgan and other major institutions frequently move cash within their organisations to account for various legal entity structures. This process can be handled using traditional methods or through automated digital repo solutions, which have recently been piloted.
The importance of intraday trading was reiterated both by Zimmerhansl and Le Guern, with Zimmerhansl stating it is cash that greases the wheels of all transactions.
Le Guern, elaborating further on why same-day transactions are especially vital, said: 鈥淚f an asset must be delivered to a client from one legal entity, and that delivery relies on several internal transfers, your existing credit line is temporarily affected, which could impact other transactions. This issue would be resolved if all related transfers occurred simultaneously.鈥�
Neelan Pavan, technical product manager at MarketAxess, went on to discuss challenges raised by customers in the repo market, stating that the most pressing question is how to get data out in the most efficient manner.
鈥淚t鈥檚 not just about accessing data 鈥� it鈥檚 about ensuring the quality and consistency of that data. On the sell side, competing project priorities often get in the way, and real progress requires seamless alignment between the front office and back office.鈥�
Pavan highlighted the 鈥渟ignificant鈥� increase in matched volumes, stating there are three key drivers for the growth: 鈥淭he buy side is demanding automation from its executing brokers, regulation such as T+1 and US Treasury central clearing, and finally there is an increasing need to manage the complexities of lifecycle events.
鈥淭hey want those processes simplified and automated with the sell side counterparties they rely on. Once the buy side achieves that automation, it stops being optional. It then becomes the standard, and they鈥檙e putting real pressure on the sell side to deliver the level of automation that鈥檚 now a prerequisite for doing business.鈥�
Zimmerhansl reiterated that automation is now crucial to being in the business, emphasising the need to offer effective solutions to customers.
Crowther was able to speak on the buy side and sell side perspective, stating: 鈥淲here we see challenges in interoperability is in the front office to connect to all of the various trading platforms, some mature, some new, and being able to support their trade lifecycle all the way through.鈥�
Williams echoed the importance of cohesion and interoperability, saying: 鈥淚t鈥檚 so important that the framework and system works together to provide good data, reliable and reachable third parties, good tech, and no trade failures.鈥�
One of the main challenges in repo seen by Julien Berge, head of fixed income and repo at CACEIS, is thinking outside of the box: 鈥淭he repo market is mature, which makes it essential to think beyond local optimisation. While technology has arrived, most blockchain and innovation projects are still proprietary, which fragments the market even more. Without interoperability and standardisation, we risk missing the real opportunity: to create a more connected, efficient and resilient ecosystem.鈥�
When discussing technological advancements in the industry, Crowther agreed with Williams 鈥� that the technology is available, but accessing it is another issue. To fund it, firms will have to reallocate budgets, it will take time to roll out the new technology to clients, and larger, multi-market organisations.
While the technology and frameworks are all there, the panel concluded that the need for automation, digitalisation, and interoperability to improve efficiency and reduce costs is high, in order to enhance overall market functionality. It is not about whether the technology exists to meet buy side and sell side needs 鈥� the challenge is adoption.
Maintaining financial stability
As global financial markets navigate persistent and heightened volatility, steered by macroeconomic, geopolitical, and structural factors, resilient processing capabilities are key to maintaining financial stability, according to panellists.
Speaking at the 鈥楻isk Management and Collateral Optimisation in Volatile Markets鈥� panel, Sabine Farhat, head of securities finance product management at Murex, said real-time data processing and automation are key during volatile periods, where there is increased frequency and volume of margin calls, and larger collateral movements.
Farhat said Murex has 鈥渁dded a feature with functionality in the exposure inventory to make sure clients are capable of switching on to real-time market data and intraday margin in an automated way, because fast is critical to surviving a crisis鈥�.
Farhat noted that during Covid, over 140 billion margin calls occurred within a week, highlighting that being first to transfer large amounts is a key advantage when timing is everything.
Farhat explained that tokenising collateral can enhance efficiency in situations where physically transferring assets is challenging, while also supporting more effective stress testing and risk management.
A lack of visibility and mobility of assets across silos presents a challenge for optimisation, according to Sam Edwards, head of collateral for EMEA and APAC, and Global Triparty Services at State Street.
Edwards stressed the importance of improving visibility of inventory, and focusing on interoperability at an early stage to enable optimal liability management.
He said: 鈥淲hile we can talk about all the wonderful ways in which we can shave half a basis point off the cost, a lot of the challenge is how we can best mobilise assets for cross product requirements. That's particularly relevant as we build out new infrastructure, avoiding re-building those legacy silos that we have worked so hard to bridge.
鈥淔or a number of clients, getting that central view of your inventory is still a key focus that enables you to reduce your business鈥� cash usage, and reduce overall capital requirements. So as we build again in the digital world, and drive the tokenisation efforts to bring greater efficiency to our industry, the key is to focus on how we mobilise assets and increase the scope of assets in use for collateral and margin management.鈥�
Regulatory requirements like the Liquidity Coverage Ratio (LCR) demand holding high-quality liquid assets (HQLA), even under stressed environments, but market volatility often dries up liquidity, making compliance more difficult.
Andy Crockford, director of collateral management and funding at Scotiabank, emphasised that the ability to be malleable is essential to ensure you do not fall short of the legal requirements during a crisis.
Crockford said numerous challenges currently exist on the regulatory side, and firms need to ensure they get the right side of the metrics at all times, regardless of what the market is doing.
He says the ability to adjust your trading strategies, and the way you manage and optimise collateral can lead companies in different directions.
Crockford commented: 鈥淭here may be times when you're looking to point certain currencies of collateral to certain trades to achieve a certain purpose. And other times, when there's lots of talk about the relative ratings of the government bond market, where trading strategies may change and adapt as well. It's really the ability to adapt and be nimble and to get all of your systems working, to solve as many of these things as you can.鈥�
Asma Belgaied Hassine, product deputy director at Vermeg, noted that the company is increasingly investing in automation to reduce manual processes, which, she believes, goes beyond efficiency as it builds resilience and shock-absorption capabilities.
She added that the firm is using AI to digitise collateral agreements, especially eligibility matrices, therefore automating the entire process from the agreement onboarding, to margin call calculation, to collateral allocation and settlement.
Belgaied Hassine pointed to straight-through processing (STP) as the goal, meaning no human touchpoints from start to finish.
She said they are also investing in interoperability and higher connectivity between systems internally, with triparty agents and with the global collateral ecosystem, to move from siloed to connected through APIs for seamless connectivity.
The panel reiterated that a holistic, technology-driven approach to risk management and collateral optimisation can deliver better quantifiable benefits to endure instability, leading to improved transparency and less blockages in the system.
The future belongs to those who innovate
The industry is facing an increased demand from clients for advanced technology solutions such as AI and tokenisation, as well as enhanced data, following a lack of equivalency, according to panellists.
Speakers on the 鈥楢gent Lending Evolution: Technology, Innovation, and Competitive Differentiation鈥� session explored the impact of advanced technology on securities lending front-to-back solutions, enhanced connectivity through API integrated strategies, and the growing importance of data analytics in client reporting.
Patrick McManus, head of securities lending product at HSBC, opened the discussion with his thoughts on the agency lending world and what he is seeing from clients.
鈥淚t鈥檚 clear that there is a lot of demand for increased data and transparency. In the agency lending world, that primarily comes from our clients,鈥� he explained. 鈥淎s an industry, in agency lending, there has been a lack of equivalency in terms of the technology and the data we鈥檝e had in terms of our products.鈥�
From a HSBC perspective, McManus said there is a larger demand from clients today, particularly around producing data 鈥渋n the same way that other functions and businesses that operate do鈥�.
In other words, this means 鈥済etting data delivered in real time, or at least in a fashion in which they can incorporate into their systems鈥�.
Ernst Dolce, CEO and co-founder of Banqora, highlighted that technology should not be viewed merely as a means to improve the lenders鈥� internal infrastructure, reduce costs or increase efficiency. The real focus, he noted, is on how technology delivers outcomes for clients. He explained that when founding the company with co-founder Nicholas Holden, 鈥渉ow our initial priority was helping clients achieve higher returns safely 鈥� through real-time insights, better risk management, reduced counterparty risk, and greater operational efficiency. We leverage data to help our clients make better decisions鈥�.
Continuing the conversation, Fiona Adams, head of global product development for securities finance at BNY, explored the significance of efficiency. While it can help to reduce cost, for firms it goes beyond this. 鈥淗ow do we become quicker to market the solutions that we are delivering? Data becomes key to that.
鈥淗ow do we actually unlock the data? We're in a fortunate position where we have a lot of clients sharing data with us. How do we actually capitalise on that data and then make better, faster decisions?鈥�
According to Jim Aris, executive director and head of international equity lending for Global 网爆吃瓜 Lending Solutions (GSLS) at MUFG, sometimes it is important to take a minute and look back through history and remember where we all were, to appreciate and see how far firms and technology have come today.
He added: 鈥淲here we were from a securities lending and repo market aspect three decades ago, in terms of volumes, liquidity, transparency, how people price, trade, and report securities 鈥� has fundamentally changed.
鈥淥f course, there are still certain drivers and there are key aspects, but there are significant changes across the use and volume of data. For example, the integrity and analysis of this data and how it鈥檚 used for price discovery, trading, and risk assessment. AI has the potential, to help meet industry expectations around faster more efficient decision making processes across every aspect of the business.鈥�
For Aris, it is not just trading, there remain bottle necks across various parts of the industry where technology, and especially AI, will be useful. For example, MUFG has negotiated a number of fresh legal documents over the past five years but even at this first early stage there are elements that can be improved to speed up the process.
He noted: 鈥淭here remains scope for tech to streamline and provide efficiencies and help refine every aspect of the business. Starting from the legal stage all the way through to facets such as availability and demand forecasting, collateral optimisation, exception management and of course reporting. There really are so many areas that will and are already benefitting from innovation.鈥�
In order for firms to prepare for the future, and to reach their goals in the next five years, strategy is key to working out the 鈥渂ig steps鈥� one will need to take.
Adams indicated: 鈥淲e do have some of those components in our stack today, and we've managed to accommodate them well. But you know, in 10 years time, am I still going to be able to accommodate those components, or do I need to take action now?
鈥淲e've recently developed quite a robust prioritisation framework to try and put some science around that and help us to make better decisions.鈥�
Leading the panel was Gabriele Frediani, head of development and market infrastructure coverage, Europe, at The Liquidity and Sustainability Facility (LSF).
He moved the discussion to focus on the numerous banks and technology providers in the securities finance world 鈥� asking if there was room for so many entities in this space.
For Aris, having multiple fintechs in the market is 鈥渇antastic鈥� as it provides competition. He added: 鈥淲hen we talk about innovation and tech, it鈥檚 going to move extremely fast over the next few years and it鈥檚 very exciting what the future might hold.鈥� But he highlighted the need to be cautious and ensure there is a balance between being a first mover and being a smart adopter, ensuring 鈥渢ech spend is in the right area at the right time to benefit clients鈥�.
In technology, jumping in too early can leave you with systems or items that become outdated very quickly, he added. As an example, Aris gave a comparison to the car world. He indicated that the first wave of electric cars looked advanced at the time but cannot compete with what is available on the road right now.
The product is changing so fast that each generation is fundamentally different from the previous, providing improved agility, range, battery capacity, and shorter charging times.
He concluded: 鈥淥ld electric cars are probably a great second hand buy, but early, original adopters took the hit on price as well as outdated tech. With how quickly the technology has advanced you really want the latest generation.鈥� Jumping on every piece of new technology however can be costly and short lived but waiting too long might mean missing opportunities.
So, there must be a balance between innovation, price, and smart adoption to ensure technology is proven, scalable, and fits long term needs of a business. 鈥淏enefitting from years of experience, we continue to learn and of course refine business, products, and technology,鈥� he stated.
MUFG believes that having multiple fintech providers in the market is essential. It helps to drive competition, innovation, and fundamentally gives firms a real choice in how they build solutions, which is 鈥渦ltimately what keeps the industry moving forward and keeps it an exciting market to be involved in鈥�.
网爆吃瓜 Lending is in a transformation phase and automation and AI will keep taking on routine daily tasks, the panel heard. But for MUFG, technology helps to support business and ensures the firm can continue to spend time to nurture long lasting relationships with clients and counterparts that continue to remain a key part of this industry.
According to Adams, the future belongs to people who innovate, and not to those who simply see it as a cost-reducing exercise. 鈥淚 see it as bringing value to our clients, the market, and the industry. People who stand still today will be left behind.鈥�
She also pinpointed that critical to moving forward is interconnectivity in the ecosystem. Adams concluded: 鈥淚f we all move to DLT blockchain, a handful of participants can't do that alone, and for it to work, it's that network effect that will really bring benefits. People who move will be part of that future state."
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