Two years after the U.S. securities industry successfully transitioned to T+1 settlement, the market can confidently regard the initiative as a success. When the move from T+2 to T+1 settlement was announced, many industry participants anticipated significant disruption. Concerns ranged from compressed operational timelines and increased settlement risk to heightened pressure on middle- and back-office teams. Yet, despite these challenges, the industry achieved one of the most significant post-trade transformations in recent decades with remarkably few disruptions.
The successful implementation of T+1 demonstrated the resilience, collaboration, and adaptability of the U.S. capital markets ecosystem. Asset managers, custodians, broker-dealers, fund administrators, and technology providers worked together to redesign processes, improve communication, and accelerate trade workflows.
However, now that the industry has had two years to operate in a T+1 environment, a new reality is emerging. The transition itself may be complete, but the operational pressures created by shorter settlement cycles remain. For many firms, particularly small and mid-sized asset managers, the focus has shifted from managing T+1 to sustaining it efficiently. Increasingly, automation is becoming not simply an advantage but a necessity.
The Initial Impact of T+1
The move to T+1 fundamentally changed the post-trade operating model. Under T+2, firms had an additional day to resolve discrepancies, affirm trades, manage allocations, and address exceptions. The reduction of the settlement window by 50% compressed these activities into a significantly shorter timeframe.
For asset managers, the impact was immediate.
Trade allocations needed to be completed earlier. Matching and affirmation processes had to occur more quickly. Operational teams faced tighter deadlines to identify and resolve exceptions before settlement. Any delays or manual bottlenecks that had previously been manageable under T+2 suddenly became material risks.
Many firms responded by extending operating hours, increasing staffing support during the transition period, and conducting extensive readiness programmes. Operations teams worked closely with custodians and counterparties to establish new workflows and service level expectations.
The industry’s success was largely driven by preparation. Firms invested heavily in process reviews, workflow redesign, and targeted technology improvements to ensure settlement readiness from day one.
What Firms Learned
Two years on, the lessons from T+1 are becoming clearer.
The first lesson is that operational efficiency is no longer optional. Under T+1, there is little room for manual intervention. Every exception requires faster resolution, every workflow must move more quickly, and every delay carries greater risk.
The second lesson is that visibility across the trade lifecycle is critical. Firms that invested in real-time monitoring and exception management capabilities were better positioned to identify issues before they impacted settlement outcomes.
The third lesson is perhaps the most important: firms that automated key processes adapted more effectively than those that relied on manual workflows.
While many larger asset managers entered the transition with mature operating models and significant technology investments, smaller firms often relied on spreadsheets, email-driven processes, and fragmented systems. These approaches may have been sufficient under T+2, but they are increasingly difficult to sustain in a T+1 environment.
The Growing Challenge for Smaller Asset Managers
Large global asset managers have generally absorbed the operational demands of T+1 through investments in technology, data management, and workflow automation. Smaller firms, however, face a different challenge.
Many boutique asset managers and emerging investment firms operate with lean teams and limited technology budgets. Operational teams are often expected to manage growing volumes of activity without corresponding increases in headcount.
In this environment, manual processes create both operational and strategic risks.
Operational teams spend valuable time chasing trade confirmations, reconciling data across multiple systems, managing exceptions manually, and responding to settlement issues. As transaction volumes increase, these inefficiencies become more pronounced.
Furthermore, regulatory expectations continue to rise. Investors increasingly expect operational excellence, transparency, and resilience from their asset managers regardless of firm size.
The result is a growing gap between firms that have embraced automation and those that continue to depend on manual processes.
Automation Has Become the Next Phase of the T+1 Journey
The industry’s successful migration to T+1 should not be viewed as the end of a transformation programme. Rather, it represents the beginning of a broader shift towards highly automated post-trade operations.
Automation addresses many of the challenges exposed by T+1.
Automated trade processing reduces operational touchpoints and minimizes the risk of human error. Automated exception management allows firms to identify and prioritize issues before they become settlement failures. Automated reconciliations improve data quality while reducing the burden on operations teams.
Perhaps most importantly, automation enables scalability. As firms grow, automated processes can handle increased volumes without requiring proportional increases in operational resources.
This scalability is becoming increasingly important as firms seek to remain competitive in an environment characterized by margin pressure, regulatory complexity, and growing investor expectations.
Why the Case for Automation Is Stronger Than Ever
Two years of operating under T+1 have provided firms with a clear understanding of where inefficiencies exist.
Many organizations that initially managed the transition through additional staffing or temporary workarounds are now recognising that these approaches are not sustainable over the long term.
Labour-intensive processes increase operational costs and expose firms to key-person dependencies. Recruiting experienced operations professionals remains challenging, while increasing headcount does not necessarily solve underlying workflow inefficiencies.
Automation offers a more sustainable solution.
By reducing manual intervention, firms can improve settlement performance, lower operational risk, and redeploy staff towards higher-value activities such as oversight, analytics, and client service.
In an increasingly competitive market, these benefits are becoming strategic differentiators rather than simply operational improvements.
The Role of Salerio®
For smaller and mid-sized asset managers, one of the key barriers to automation has historically been complexity. Traditional transformation projects often required significant investment, lengthy implementation timelines, and dedicated internal resources.
This is where specialist automation providers such as corfinancial® are helping to reshape the market with the Salerio exception management based trade matching and settlement solution.
Salerio’s approach focuses on enabling firms to automate critical operational workflows without the cost and disruption typically associated with large-scale technology projects. By streamlining post-trade processes, reducing manual intervention, and improving operational visibility, firms can achieve many of the benefits traditionally associated with larger technology programmes.
Importantly, this allows smaller asset managers to compete on a more level playing field with larger organizations. Automation is no longer the exclusive domain of global institutions with extensive technology budgets. It is increasingly accessible to firms of all sizes.
As the industry continues to evolve, solutions that deliver rapid operational improvements while supporting long-term scalability will become increasingly valuable.
Looking Ahead
The transition to T+1 will ultimately be remembered as more than a settlement cycle change. It exposed inefficiencies that had existed within post-trade operating models for years and accelerated the industry’s move towards automation.
Two years on, the firms that have thrived are not necessarily those with the largest operations teams. They are the firms that embraced more efficient workflows, improved visibility, and invested in automation.
For smaller asset managers, the message is particularly clear. The question is no longer whether automation is required for a T+1 world. The question is how quickly firms can implement it to remain competitive, resilient, and scalable.
The industry’s successful adoption of T+1 proved what can be achieved through collaboration and preparation. The next chapter will be defined by automation.
