Recap: 29th Annual Securities Operations Summit

This year, ISITC celebrated our annual Securities Operations Summit, taking place in Boston from March 19-21, 2023. Over the course of the three days, ISITC members and attendees dug into this year’s theme, The Great Balancing Act, through a variety of engaging general sessions, break-out group conversations, networking hours, and in-person meetings. ISITC Chair, Kristin Hochstein, set the stage for the day’s discussions. You could see how the theme of the balancing act continued to play throughout the day and weave into every conversation across a variety of topics:

  • Harmonizing the roles of technology and people
  • Balancing short- and long-term impacts within education and diversity
  • Prioritizing quality, usable data vs. more data
  • Leveraging experience to perform long ingrained functions while changing/adapting 30 years of history
  • And evaluating the purpose of financial system capitalism with the real need to do good

Achieving the right solution

The central theme around how to create and achieve this balance led to a fantastic talk by Mona Vernon of Fidelity Labs. She covered a wealth of topics relating to balancing, including using both feedback and data to challenge your mindset, the conflict between culture and strategy, and even balancing the mind of an engineer with the softer side of intuition and thoughtfulness. She also explored the Gravity and Control framework and importance of High Agency when trying to get things done.

Mona made the important point that, just because you build a solution, doesn’t mean the demand is there. We can look to the past, such as the death of the Global Straight Through Processing Association (GSTPA) as a clear example that just putting a technology solution in place won’t work if it doesn’t meet the need, or fit how users and clients want to work – an idea echoed in a panel later in the day that was moderated by Chris Daur of Goldman Sachs.

The move to T+1

T+1 was on everyone’s mind, and The ValueExchange delivered some excellent research on where we expect to find the key challenges. Barney Nelson from The ValueExchange and John Abel of DTCC said May 2024 is coming whether we are ready or not – but there remains significant delusion that service providers and third parties will somehow magically solve the key foundational problems. Particularly worrying is the lack of engagement overseas, where the T+1 regime may cut participants out of the US Markets, or drive liquidity overseas in multi-listed scenarios.

The survey results were followed up by the T+1 Panel led by Lou Rosato of BlackRock.  On the panel where Tom Damico of J.P. Morgan, Katelyn O’Grady of Brown Brothers Harriman, Michele Pitts from Citi, and Brian Steele of Goldman Sachs.  The panelists agreed that there was a need to have a horizontal view in approaching solutions.  Most had formed internal steering committees in 2021, and agreed that client education and communication are critical priorities moving forward.  Also, leveraging data to increase straight through processing (STP) and efficiency was a big focus.

Industry alignment

Overall, the main issue surrounding T+1 isn’t technology, it’s the interconnected and dependent legs of all processes in the industry – from ADR-Ord conversions to securities lending, collateral management, funding, and dependent relationships and split functions like with prime brokerage, correspondents, give ups, inventory alignment, and more.

Allocations are a huge topic, and there needs to be an analysis of the timings and what percentage will fail to meet new timelines – as well as the types of firms and geographical locations. Current thinking is that this may be a costly and disenfranchising lift for tier two and three players, as well as players in foreign markets where time zones are a basic reality that can’t be worked around.

Blockchain deep-dive

Jason Ward of Fidelity Center for Applied Technology then led a panel on blockchain and what it could be. He was joined by Laureen Oullette of the Fidelity Center of Applied Technology and Tim Rice of Coin Metrics.  It wasn’t a discussion about how to use distributed ledger technology for key systems today, but a fact check. The view should be towards what markets are good candidates to move to new technologies and what value add would be unlocked.  This will not happen tomorrow, but is inevitable down the line, and we need to determine if that is 2-5 years or 5-10 years or more.  There is significant promise in the transparency and speed these evolving technologies may bring.

Spotlight on ESG, Corporate Citizenship & Diversity

We then shifted to how ESG in financial services is driving Corporate Citizenship and Diversity.  Wendy Mailot of MFS brought together Cathy Saunders from Putnam Investments, Melissa Sternberg of SWIFT, and Michelle Thompson-Dolberry of MFS.  Wendy’s panel was clear that we’re not talking quotas and checking boxes, but aiming to foster an inclusive workspace, and trying to define what that means and looks like. Education never ends – it’s not simply taking a diversity class and moving on. Support and vocal advocacy are key in making sure employees and peers feel seen. It becomes about creating a culture, through ERGs (Employee Resource Groups) and the like, not just sending a check to act like a good Corporate Citizen, but truly getting involved in the communities they operate in.

The intersection of technology and collaboration to achieve efficiency

We then moved on to Chris Daur’s panel that talked about empowering operations through technology.  Chris had an engaging panel including Kate Chatzopoulos of Symphony, Conor O’Boyle from AccessFintech, Kevin Urlik of American Century Investments and Adam Watson from BNY Mellon.

Let’s pause here and restate – Custody is Cool.  We all know it.

It’s clear decision-making is being compressed, with less and less time to collect more and more data, and almost immediate timeframes put on making informed, critical decisions. Change is accelerating, and T+1 is certainly a key driver, but there are many other factors.

Enabling operations is not about just efficiencies, but also freeing up capital for the firm and increasing capacity for operations to do its job better and faster. Collaboration is key in this space. The task can’t be achieved by a single firm, but the interaction of firms across the markets, a theme we heard in the T+1 panel as well. The right technology must be used, and there is a ton of data that we need to be sure is the right and useable data, but it comes down to interactions and dependencies. You are only as strong as your weakest or slowest link.

Looking ahead

So where do we go from here? To wrap up the event, Stefanie Coleman and Reetu Khosla from Ernst and Young shared the research they conducted and a forthcoming paper. Three key themes that emerged on the road ahead were:

1) We will all become technologists, and we need to understand existing and emerging capabilities to enable transformation. What can certain technologies do, and what can’t they do?

2) Gen Z is changing the rules of engagement, and their demands are different. We saw this theme reflected in Wendy’s panel, exploring how the next generation of current and future employees want to interact, and what they are expecting in those interactions.

3) Finally, the appeal of operations jobs will depend squarely on systemic improvements in not just the operating model, but job quality, enablement and culture.

These ideas are just the beginning. This year’s event opened the door to interesting questions and conversations that will continue shaping the future of financial services in the months and years to come. We look forward to continuing the conversation with all of you. Want to join the discussion and get involved with ISITC? Be sure to check out our website for resources, tune into LinkedIn and Twitter for the latest news and announcements, and reach out to to get in touch.