Citibank has unveiled a new edition of “Securities Services Evolution” – a whitepaper focusing on analyzing and providing insights into the evolving landscape of securities services and the broader securities market ecosystem.
Drawing from data collected from 12 Financial Market Infrastructures (FMIs), fintech firms, banks, and industry players, the report sheds light on the challenges and expectations shaping the global securities market.
In the latest release, among other things, the Wall Street banking giant outlined 3 bullish factors that could serve as a catalyst for the crypto market’s growth going forward, according to the information retrieved by Finbold on August 22.
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3 factors that could drive crypto expansion
Primarily, a factor that could significantly accelerate crypto’s growth trajectory in the future is the rapidly growing interest in Distributed Ledger Technology (DLT).
Notably, 74% of respondents surveyed by Citi said they are engaging in DLT and digital asset activities, representing a year-over-year increase of 27%.
“74% of our respondents engaging in Distributed Ledger Technology (DLT) and digital asset initiatives (increased from 47% last year) in a clear sign that DLT momentum continues to grow.”
– Citi’s report found.
Additionally, Citi’s results revealed that “38% of market participants are today live with digital asset offering,” compared to 22% for DLT. Given that the lender surveyed nearly 500 market participants for this report, it means that roughly 190 and 110 of these institutions are offering digital asset or DLT services, respectively.
Finally, Citi emphasized there is growing confidence in the securities market that digital money, including central bank digital currencies (CBDCs), as well as bank, and non-bank-issued stablecoins, is evolving rapidly.
In particular, 87% of respondents see digital money as a strong means to support securities settlement, up from 72% last year.
Challenging times for the securities ecosystem
Meanwhile, Citi’s new financial report signaled potential challenging times for the broader securities ecosystem.
According to its findings, accelerated settlement remains the key focus area for all FMIs and market participants worldwide, with 77% of respondents saying they expect a substantial impact on their business.
“Our research shows that the rapidly accelerating move to T+1 in major markets poses significant challenges to industry participants, leaving an urgent need to drive innovation, automation, and efficiencies in global operating models.”
– said Okan Pekin, Global Head of Securities Services at Citi.
Although the primary focus remains on the impact of accelerated settlements, Citi also pointed out a growing consensus on how to effectively prepare for it.
Participants are prioritizing clients and counterparties first, followed by internal platforms and processes, and considering staffing and location strategies.
Survey results indicate that 69% are concentrating on automating and standardizing client communications, while 64% aim to enhance or replace their technology platforms.
