The Culprit Slowing Automation in Asset Servicing

A.I. in U.S. Ops May Help T+1 Overseas

The U.S. securities operations industry is seeing a boom of interest in artificial intelligence (A.I.) tools — from generative A.I. to predictive fail systems — as global market participants prepare for tighter settlement cycles across Europe, the United Kingdom, and Switzerland from Oct. 11, 2027.

This wave of enthusiasm comes as global financial services institutions face the daunting technological challenge of coordinating among 27 European Union member countries — each with its own financial market infrastructure — as well as Switzerland and the U.K. Firms are equally wary of costly settlement penalties mandated under the E.U.’s Central Securities Depositories Regulation (CSDR) and similar rules in the U.K.

Kaisha Schnoll, vice president, settlements at STP Investment Services, says T+1 in the U.S. went a lot smoother than everyone anticipated. But she says she doesn’t think it will be so simple when it comes to the U.K. and Europe. Anecdotally, Schnoll says, a lot of brokers and custodians, and investment firms have yet to adopt technology and automation. Furthermore, current financial penalties for fails in the U.K. and the E.U. mean that as they move to T+1, “there’s even more at risk.”

“And I think that that’s what’s going to motivate a lot of these firms and investors to put the resources and the budget behind preparing for T+1,” she adds.

STP Investment Services is not yet utilizing A.I. within its trade settlement platform. Over the past year, it has been looking at a fail module that uses A.I. to predict failures. The tool uses A.I. to analyze data from custodians, brokers, and securities lending agents, alongside positional data to predict whether a trade will settle or not. It also includes a built-in tool to calculate CSDR penalties.

Read more from Kaisha and other subject matter experts in FTF here.

Technical and regulatory questions surround Europe’s T+1 move

Last year, all eyes were on North America, as the United States, Canada, and Mexico moved from T+2 to T+1 settlement. The move has been hailed as a success, but now the pressure is on across the Atlantic.

T+1 in the UK: Why the road ahead will be harder than the US playbook

In February 2025, the UK’s Accelerated Settlement Taskforce (AST) published its long-awaited T+1 Settlement Plan, signalling the country’s intent to shift to a one-day settlement cycle by 11 October 2027. While that date may appear comfortably distant, the reality is that the path to T+1 is likely to be far more complex than the US transition that happened last year, writes Kaisha Schnoll, vice president, trade settlements at STP Investment Services.

What Firms Get Wrong When Changing Investment Operations Technology

By Pat Conroy, Vice President, STP Investment Services | Featured in WatersTechnology | April 28, 2026

Pat Conroy, Vice President at STP Investment Services, authored a featured article in WatersTechnology examining the most common — and most costly — mistakes investment firms make when modernizing their operations technology. His central argument: technology selection is not the same as operating model design, and firms that treat it that way are setting themselves up for fragile, not successful, modernization.

The Core Problem

As Pat writes: “Across the industry, a consistent pattern is emerging: technology selection is treated as the solution, while operating design, governance, and accountability are treated as secondary considerations. The result is not necessarily failed modernization, but fragile modernization.”

Drawing on real-world technology transitions across the buy side, Pat identifies four recurring modernization errors — each with a distinct root cause and a consistent lesson about what successful technology change actually requires.

The Four Modernization Errors

1. Treating Platform Selection as the Operating Model

In one case Pat describes, a mid-sized US boutique asset manager selected a cloud-native platform to consolidate its reporting and core infrastructure. The platform decision was sound — but the firm underestimated the transition operating model. During migration, responsibilities across legacy and new systems were not clearly defined. Exception-management ownership blurred. Daily processes became more fragile, not less. The lesson, as Pat frames it: “Platform modernization succeeds only when operations modernization is designed in parallel. The most critical question during the transition is often not ‘Does the software work?’ but ‘Who owns what while it stabilizes?'”

2. Scaling by Adding Tools Instead of Redesigning the Model

A rapidly growing investment manager added point solutions to manage operational pain points as volume increased — a move that compounded fragmentation rather than solving it. Data flowed through more systems, exceptions multiplied, and manual workarounds became embedded in daily routines. Pat’s diagnosis: “Scaling is not primarily a technology procurement exercise. It is an operating model redesign.”

3. Automating Without Redesigning Control Architecture

At one firm, an automated trade workflow encountered a timing gap during a cancellation-and-rebook cycle — what appeared to be human error was a design flaw, a race condition between automated file timing and workflow sequencing. Automation had not eliminated risk; it had accelerated it. Pat identifies four design requirements for effective automation governance: clear accountability for automated outputs, monitoring for exceptions and drift, auditability across machine-executed workflows, and preservation of separation of duties.

4. Ignoring Platform Design Philosophy and Roadmap Risk

One investment manager implemented a next-generation platform while aware it was still maturing. The challenge wasn’t core functionality — it was edge cases: creative trading strategies across multiple asset classes that stretched beyond what the system readily supported. Roadmap timelines became operational constraints. Pat’s takeaway: modernization decisions must account not just for current needs, but for future complexity.

The Broader Lesson

Pat closes with a principle that applies across all four errors: “The firms that navigate technology transitions most effectively are not simply those that purchase the most advanced systems. They are the ones that treat modernization as an operating discipline grounded in data clarity, governance, and ownership from day one.”

What’s often missing, he argues, is independent, operator-led oversight — people who have seen where transitions quietly fail, where temporary workarounds become permanent, and where early data decisions surface as problems months after go-live.

About Pat Conroy

Pat Conroy is a Vice President at STP Investment Services, where he works with investment managers on investment operations strategy, technology transitions, and operating model design. STP provides investment operations outsourcing, fund administration, compliance, and managed services to registered investment advisers and institutional asset managers.

Read the full article in WatersTechnology (subscription may be required)