The global post-trade industry is on the brink of a remarkable transformation, driven largely by advancements in digital assets and artificial intelligence. A recent whitepaper by Citi, titled “Securities Services Evolution,” reveals insights from their fifth annual survey, which collated feedback from 537 market participants including custodians, broker-dealers, and asset managers. This comprehensive analysis underscores how innovations like tokenization and AI-driven automation are set to redefine the landscape of trade processing.
Citi projects that by the year 2030, a striking 10% of market turnover could be attributed to tokenized assets. The report identifies bank-issued stablecoins as critical enablers of this shift, enhancing collateral efficiency and facilitating the tokenization of funds. Notably, the Asia-Pacific region is at the forefront of this adoption wave, driven by an enthusiastic retail interest in cryptocurrencies and supportive regulatory frameworks for digital assets.
AI technology is also poised to significantly enhance post-trade efficiency, with 86% of surveyed firms actively testing AI for client onboarding—identified as the primary use case for asset managers, custodians, and broker-dealers. Moreover, 57% of respondents are piloting AI specifically within post-trade processes. As the industry gears up for a T+1 settlement cycle, where transactions are settled one business day after the trade date, the urgency for speed and automation expands.
“From accelerated settlements to automation in asset servicing, and increased shareholder participation and governance, the collective vision of firms worldwide is converging on the same core themes. The industry is at the cusp of significant change as market participants intensify their focus on T+1, accelerate the adoption of digital assets, and implement GenAI across their operations,”
stated Chris Cox, Head of Investor Services at Citi. As we move forward, the integration of these technologies promises not only to streamline processes but also to open new avenues for growth and operational efficiency in the realm of post-trade services.
The Transformation of the Post-Trade Industry
- Digital Assets and AI Transformation: The post-trade industry is evolving due to the rise of digital assets and artificial intelligence, reshaping how trade processing is conducted.
- Market Turnover by 2030: Citi estimates that 10% of market turnover could involve tokenized assets by 2030, influencing how investments and transactions are made.
- Role of Stablecoins: Bank-issued stablecoins are identified as crucial for improving collateral efficiency and enabling fund tokenization.
- Asia-Pacific Leadership: The region is leading the adoption of digital assets, driven by retail interest and supportive regulations, potentially impacting global market dynamics.
- AI in Client Onboarding: 86% of firms are testing AI for client onboarding, indicating a shift in how financial services will adapt to enhance customer experiences.
- Focus on Post-Trade Efficiency: 57% of organizations are piloting AI specifically for post-trade functions, suggesting advances in service delivery and operational efficiency.
- Urgency for Speed and Automation: The move to T+1 settlement cycles highlights the industry’s necessity for faster and more automated processes.
- Common Themes of Change: Accelerated settlements, automation, and governance are becoming recurrent priorities as firms adapt to a rapidly changing environment.
Transforming the Post-Trade Landscape: A Comparative Analysis
Citi’s recent findings on the post-trade industry underscore noteworthy shifts within this dynamic sector, propelled by technological advancements such as digital assets and artificial intelligence. In comparison to similar reports from other major financial institutions, Citi emphasizes a proactive stance towards tokenization and AI-driven automation, indicating a competitive edge. Unlike some of its peers, which remain cautiously optimistic about digital transformations, Citi positions itself at the forefront of innovation, indicating that 10% of market turnover could shift to tokenized assets by 2030. This prediction places Citi ahead in understanding where future capital flows will likely concentrate.
However, there are potential drawbacks, particularly for firms lagging in digital adoption. While Citi leads the way with its vision for acceleration and automation, competitors may struggle to keep pace. The strong retail interest in crypto throughout the Asia-Pacific region not only highlights a robust opportunity but also presents challenges for those in regions with less regulatory support. The findings suggest firms that fail to adapt could face significant hurdles in client acquisition and retention, particularly as asset managers increasingly prioritize technology in onboarding processes.
Moreover, the focus on T+1 settlement cycles underscores the need for operational efficiency—an area where firms that embrace AI may find themselves ahead. However, organizations that are hesitant to implement AI technologies may find their workflows becoming less efficient, creating operational bottlenecks. The urgency expressed by Citi could serve as a wake-up call for others in the industry, as the tempo of digital transformation accelerates. As such, institutions aligned with these innovations are likely to benefit from enhanced client engagement and improved settlement efficiencies, while those lacking commitment may find their competitive edge eroding.
This transformative phase in the post-trade domain could offer vast opportunities for early adopters and technologically savvy firms that align themselves with the emerging trends highlighted in the report. Conversely, firms that resist change or are slow to innovate may encounter significant barriers to growth and market relevance as the landscape evolves rapidly.
