Post-trade Processing: Challenges to face in capital markets

The ongoing revolution in the post-trade processing present an array of challenges for capital markets. Rising costs, tightening squeeze on fees, and complying with regulatory, in tandem with customer demanding for greater transparency and real-time data, are making capital market intermediaries to embrace advance technology solutions.

This blog will highlight how adopting IMS solutions with a structured approach can help custodians and firms in capital market in addressing the challenges and gaining a competitive edge.
Post-trade Processing: Challenges to face in capital markets

What are the post-trade processing challenges for capital markets?

Starting from the moment a product is packaged to the point of its delivery, we now have the ability to virtually monitor the progress of any item we purchase. This heightened level of visibility enables us to steer clear of unexpected developments, promptly handle any challenges that may emerge, and instils a reassuring sense of control over the situation.
Now, you can imagine this in the world of post trade processing, this very same degree of transparency can open new avenues for the capital market firms.
Currently, there is a lack of transparency in identifying and tracking a transaction across various intermediaries in the post-trade processing cycle. As a result, capital market players face significant costs and operational risks associated with the failed reconciliation status. This could be altered more quickly with a well-structured data processing and workflow management system that can organize, defragment, manage and control the entire post trade processing and money movement activities of an enterprise.

Delving deep into the core issue- Post trade processing

Even though the securities industry has made strides in enhancing automation and achieving higher straight-through processing rates in recent decades, the challenge remains in establishing transparency and achieving comprehensive visibility throughout the entire transaction lifecycle, particularly in the confirmation, settlement and reconciliation processes. Let’s break down these operational challenges into three stages to look at issues affecting the systems for post-trade processes:


Given the growing industry emphasis on systemic resilience, the absence of transparency in the confirmation process is disconcerting. When an intermediary encounters operational challenge that potentially could lead to a bottleneck, it's crucial for companies to have real-time visibility into such occurrences, enabling them to manage the situation proactively.

Trade Settlement:

While it's not common for securities to end up in the wrong places, when it does happen, it results in significant financial costs and operational risks. These challenges will become even more pronounced in Europe once the financial penalties associated with CSDR's settlement discipline regime are enforced. This concern is especially relevant if the industry seeks to reduce settlement failures overall and update its market practices, a critical step in adapting to T+1 environments.

Matching and Monitoring:

While capital market firms or intermediaries can monitor trades once they've settled, their ability to gather information during the in-flight post-trade process is quite limited. As a result, attaining end-to-end visibility throughout the entire lifecycle is a formidable task, and effectively managing operational risks in potential trouble spots becomes quite challenging.

How ECS Fin can help

We have designed an IMS trade processing solution to enable capital market firms to benefit from fully customizable and fully connecting applications capable of orchestrating, streamlining, overseeing, and governing the complete spectrum of trade processing cycle. Our solution supports ‘Securities View’ to let customers experience end-to-end processing cycle by delivering real-time status updates to all involved parties. We accomplish this by utilizing Unique Transaction Identifier (UTI) to connect all Swift messages associated with the same securities settlement process.
This streamlined approach facilitates the quick resolution of any issues or trade failures, ultimately guaranteeing precise trade settlements.
It’s time to transition effortlessly to an integrated trade processing platform without the need to handle tokens or manually re-enter data for individual interactions with each counterparty.
Process, Manage, and Control all Trade and Funds related activities.
Utilize real-time dashboards and notifications to minimize breaks
Exchange data via Host2Host, shared service centre, and ECS Swift Service Bureau.
Organize, Streamline, and Defragment trade processing workflows.
Comply with every counterparty’s preferred messaging standards/protocols, including ISO 20022.