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The Road to T+1: Why Businesses Should Examine Data, Breaks, and Controls Now

Financial institutions are rapidly moving toward a T+1 settlement cycle, down from the traditional T+2. As companies prepare for the transition, however, it is crucial to first examine data, breaks, and controls.

The move to T+1 settlement is a significant change that will require a thorough evaluation of existing processes, systems, and controls. By examining data, breaks, and controls now, companies can get ahead of five key challenges and address them before the T+1 deadline. These challenges include:

  • Increased data volume and complexity

As businesses move toward T+1 settlement, the volume and complexity of data being processed and reconciled will increase significantly. This surge can lead to data discrepancies, making it crucial to have robust reconciliation processes in place.

  • Time sensitivity

With a shorter settlement cycle, businesses have half as much time to identify and resolve breaks or discrepancies in data. In this environment, efficient and accurate reconciliation is critical for avoiding delays, financial losses, and compliance issues.

  • Regulatory compliance

Regulatory requirements are constantly evolving, and reconciliation processes must keep pace to avoid penalties and reputational damage.

  • Scalability and flexibility

As businesses grow or experience seasonal fluctuations, reconciliation solutions must be able to scale and adapt accordingly.

  • Security and data privacy

Handling sensitive financial data requires stringent security measures. With the rise of cyber threats, businesses must protect all data from unauthorized access and breaches, including daily settlement data.

Companies that still rely on manual reconciliation and spreadsheets should be especially mindful of the risks of transitioning to T+1 settlement. Even those that use a hedge fund reconciliation solution need to thoroughly examine data, breaks, and controls now to make sure their current workflow can keep up with the realities of T+1 settlement.

 Overcoming the Challenges of T+1 with Technology

IVP Reconciliation Solution is specifically designed to address the challenges of transitioning to T+1 settlement. Key features that are vital to efficient T+1 settlement include:

  • Automated Reconciliation: Automated reconciliation reduces manual effort, minimizes errors, and enhances efficiency in matching and validating investment data.
  • Real-time Validation: Real-time validation checks enable businesses to identify data discrepancies or breaks promptly and take corrective action immediately.
  • Exception Management: An intuitive interface for managing exceptions makes it easy to address breaks swiftly and efficiently, even as data volumes rise.
  • Customizability: The platform can be customized to implement specific reconciliation workflows, validation rules, and exception-handling processes.
  • Cloud-based Platform: Because it offers cloud-based reconciliation, our solution is highly scalable and fully equipped to handle higher data volumes during the transition to T+1.

Transitioning to T+1 settlement poses a number of challenges, the impact of which may not be clear until after the switch has already been made.

To stay ahead of these challenges and avoid the risks of delayed or inaccurate reconciliation, consider automating these workflows with IVP Reconciliation Solution.

Reconciliation Solution

This reconciliation solution uses AI and ML to increase efficiency, accuracy, and flexibility., i It features “any-to-any” reconciliations, including bank reconciliation, and processes millions of transactions in minutes, allowing data reconciliation from a fund, fund admin, and counterparty in a single, N-way reconciliation process. Offered in conjunction with reconciliation as a service, the combined power of the solution and service ensure accuracy and efficiency in every report.

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