Times are changing fast for the financial services industry, spurred on as much by a technological imperative to move at the speed of thought as by the lingering ghosts of bank failures and a global pandemic. Forthcoming research by Hakkoda suggests as many as 64% of organizations intend to monetize their data in 2024, signaling a wakeup call for those organizations without a monetization strategy in place.
Also top of mind for almost every business in the sector as we wade into 2024 is the Securities and Exchange Commission’s new T+1 requirements, slated for implementation on May 28th of this year. These requirements will shorten the time frame for settling securities trades from a two-day (“T+2”) window to just one day after trade (“T+1”). They will also include new rules related to the processing of institutional trades by broker-dealers as well as record-keeping protocols for registered investment advisers.
To prepare for this shift, businesses large and small will require efficient and reliable data sharing and storage solutions. For those still trailing behind on legacy data systems, the countdown to T+1 marks a wakeup call to invest in data innovation, cloud data technologies, and the modern data stack while there’s still time to act.
In this blog post, we’ll explore how a data strategy built in and around the Snowflake Data Cloud can be a game-changer for businesses looking to stay ahead in the ever-changing financial landscape. We’ll also explore how, together with a trusted migration partner like Hakkoda, it’s not too late to enter the data monetization race and achieve T+1 compliance on arrival
Understanding the SEC’s T+1 Requirements
The T+1 initiative by the SEC marks a significant shift from the existing T+2 system, aiming to streamline securities transactions and minimize associated risks of litigation and fraud.
“I support this rulemaking because it will reduce latency, lower risk, and promote efficiency as well as greater liquidity in the markets,” said SEC Chair Gary Gensler following the announcement of the new requirements. “Taken together, these amendments will make our market plumbing more resilient, timely, orderly, and efficient.”
The new requirements will also require brokers and dealers to either enter into written agreements or establish, maintain, and enforce written policies and procedures reasonably designed to ensure the completion of settlement processes “as soon as technologically practicable.”
This nod to technology in the very language of the new T+1 requirements highlights the gaps in data handling among financial institutions—and reinforces the role the right data stack will play in preparing for that looming compliance date.
Optimizing Financial Performance with Snowflake
T+1’s shorter settlement cycle, designed to benefit investors and reduce the credit, market, and liquidity risks posed to market participants, will inevitably demand accelerated data handling and processing pipelines. Large volumes of sensitive data will need to be processed within a tight window with no margin for error, which will prove an uphill task for many data management systems.
Fortunately, the powerful data sharing and real-time processing capabilities of Snowflake’s Financial Services Data Cloud make it a natural fit for financial firms preparing for the T+1 shift. It also enables secure, real-time data exchange between teams, across departments, and even with external stakeholders—catalyzing a scalable, interoperable data ecosystem that allows you to complete transactions faster while keeping a finger on the pulse of volatile market conditions.
Going Beyond T+1: Data Monetization and Snowflake Native Apps
For those businesses who are already looking beyond T+1, seeing recent action by the SEC as a harbinger of even faster transaction speeds to come, the journey to data innovation has a slightly more ambitious destination: real-time data sharing and monetization capabilities. The ability to securely create, share, and monetize feature rich applications with Snowflake Native Apps is an essential differentiator for organizations in this camp, allowing them to tap into a large user base of Snowflake customers around the globe while taking advantage of Snowflake’s continuous availability, global collaboration, comprehensive governance, and robust security measures.
By using Snowflake’s cloud infrastructure as the foundation for application development, users can leverage a host of best-in-breed features while accelerating development and deployment timelines. Once your application is built and deployed, it can be made available virtually anywhere, bringing you one step closer to a “T+0” future.
T-Minus Six Weeks to T+1: Data Modernization and Monetization with Hakkoda
The T+1 countdown is ticking away furiously, and many financial service organizations are starting to wonder how they can meet that May 28th deadline, especially if they suspect that getting their data house in order will require a full-scale cloud migration. Even for large firms already safely in the cloud and who already have a roadmap to achieving T+1 compliance, the eventuality of T+0 highlights the importance of future-proofing data strategies that allow for real-time monetization and lay the groundwork for an AI-driven future.
The good news for these organizations, however, is that it isn’t necessarily too late to turn their ship around with the collaboration of a trusted migration consultancy.
As a Snowflake-recognized Legacy Migration Accelerated Partner, Hakkoda brings deep industry experience together with best-in-class expertise across the modern data stack, providing smoother, faster migration experiences for our clients.
Our scalable teams of 100% SnowPro certified data experts, together with industry-tuned Solutions and Accelerators, are prepared to take on your biggest data challenges while getting you T+1-ready in as little as six weeks and emerge on the other side fully equipped to do more with your data than you ever thought possible.
Ready to transform your tech stack and explore the benefits of real-time data monetization? Let’s talk.