DTCC's M2i Workflow Enhances Settlement Efficiency, Goldman Sachs Reports
In a significant step forward for the financial industry, Goldman Sachs has reported a remarkable improvement in settlement efficiency, largely attributed to the implementation of the Depository Trust & Clearing Corporation's (DTCC) CTM Match To Instruct (M2i) workflow. This breakthrough comes as firms across the US gear up for the transition to a T+1 settlement cycle, highlighting the importance of advanced automation and streamlined post-trade processes.
Goldman Sachs initially embraced the M2i workflow in Q4 2022, aiming to refine settlement operations and enrich the post-trade experience for clients. The results have been nothing short of impressive, with the company achieving a more than 99 percent same-day affirmation rate. This marked improvement brings to light the pivotal role of automation in enhancing operational efficiency and client satisfaction in today's fast-evolving financial landscape.
Key Achievements with DTCC’s M2i Workflow
The deployment of the M2i workflow has led to notable successes:
- An additional 38 percent reduction in same-day affirmation exceptions was observed, demonstrating the workflow's effectiveness in minimizing operational hiccups.
- A significant 64 percent reduction in US settlement fails by value indicates a robust improvement in the reliability of settlement processes.
- Enhanced standard settlement instruction enrichment capabilities within the M2i platform have empowered Goldman Sachs to increase the rate of settlements without necessitating further input from operational teams.
The Path to T+1 Settlement
As the financial industry edges closer to the T+1 go-live date, the urgency to optimize settlement processes can't be overstated. The M2i workflow, with its central matching and auto-affirmation mechanisms, plays a critical role in this mission. Risa Lederhandler, Global Head of Equities and Securities Services Operations at Goldman Sachs, remarked on the significance of automation in achieving operational efficiency and the importance of heightened affirmation rates by 9pm ET on trade day as the industry prepares for T+1.
Val Wooton, Managing Director and General Manager at DTCC, also shared insights on the benefits of M2i, highlighting the "significant increase in same day affirmation rates for DTC-eligible trades" that ultimately contributes to reducing costs associated with trade failures, exception resolution, and operational friction.
Conclusion
The successful implementation of DTCC's M2i workflow at Goldman Sachs serves as a beacon for the financial industry, illuminating the path to more efficient, reliable, and client-friendly settlement processes. As the T+1 settlement date approaches, the sector is witnessing a transformative shift towards greater efficiency and reduced operational risk, setting a new standard for post-trade operations.
The achievements underscored by the M2i workflow not only enhance Goldman Sachs’ operational capabilities but also represent a significant leap forward for the financial services industry at large, aligning closely with the imminent transition to T+1 settlement.
Analyst comment
This is positive news. The implementation of DTCC’s M2i workflow has significantly improved settlement efficiency for Goldman Sachs. This breakthrough highlights the importance of automation and streamlined post-trade processes. As the financial industry prepares for the transition to a T+1 settlement cycle, the market can expect increased operational efficiency, reduced settlement fails, and improved client satisfaction.
