Tech budgets on the rise due to T+2

The majority of buy-side, sell-side and custodians have or will increase their technology budget in response to T+2, a survey has shown.

According to a survey by SS&C Technologies, more than half of 50 respondents suggested that additional infrastructure improvements would be needed.

Other results from the ‘T+2 Preparedness Survey’ showed that 34% of executives would seek to invest in products to automate the post-trade cycle with 48% of buy-side respondents considering this to be their top priority.

Almost half of custodians also stated that their main priority was investing in emerging technologies such as the application of blockchain to the post-trade cycle.

Under the T+2 settlement cycle, it currently takes two days after the transaction date for the settlement or the transfer of money and security ownership to take place. Using blockchain technology some market participants believe that T+0 can be achieved.

According to the survey, 78% of respondents believe it is likely that the U.S will move to a T+1 settlement cycle within the next decade.

“Firms are operating in a dynamic environment that requires agility, efficiency, and reliability. The survey findings show a widespread awareness in the industry regarding the need for adequate preparation time and a commitment to maintaining a robust technology infrastructure,” said Bob Moitoso, senior vice president and general manager, financial markets, SS&C Technologies.

“We counsel customers to be proactive in their approach despite the long lead time to prepare, and the survey feedback really resonates with that guidance – if you haven’t started, you’re already behind.”