The relentless push to optimise costs, digitise unstructured data, and maximise Operational Resilience were the biggest strategic priorities for Clients across Cash and Securities markets this year, a trend that shows no sign of reversing course in 2026, as Fraser Wikner, CEO at MYRIAD Group Technologies Ltd (MGTL), explains:
The industry is laser-focused on costs
Industry costs continued to rise in 2025.
On the Cash side, Banks, whose budgets were already being badly squeezed by the ever-expanding list of KYC and AML compliance obligations had to spend vast sums of money on migrating their systems to the ISO 20022 messaging standard.
ISO 20022 is a good thing for the industry. The enriched data allows firms to streamline Financial Crime Compliance, enhance Customer insights, improve payment exceptions and investigations, strengthen Corporate Treasury activities and develop new innovative solutions – [1] but Clients have repeatedly said the upgrade costs required are not trivial.
Reports suggest smaller Banks with limited cross-border operations are spending between $50 – $100 million on their ISO 20022 implementations, rising to $500 million at some of the bigger players. The sums involved are so sizeable because of the complexities Banks face when connecting their institutions to all of the different clearing systems, e.g. the US-based CHIPS, UK CHAPS, the EU’s T2, etc.[2]
The Securities Services industry is not faring much better from a cost perspective either.
T+1 settlements may have collateral and liquidity optimisation benefits, but the transition – first in North America and now in Europe has been a big drain on resources at Banks, Brokers, Asset Managers and Asset Owners. Firebrand Research recently flagged that the T+1 transition costs in Europe are expected to range somewhere between $223,000 for a small-cap buy-side firm and $36 million at the largest Global Custodian. [3]
This comes as the industry is becoming increasingly sensitive about post-trade charges, especially following a report by the Association for Financial Markets in Europe (AFME) which showed that European CSD costs are on average 65% more expensive than a North American settlement, before adding safekeeping charges at European CSDs which are between 19% and 650% higher than their US peers.[4]
Clients supporting both the Cash and Securities markets have repeatedly said that they are looking to obtain meaningful cost savings across their operations in 2026.
A good place to start would be to identify and then remediate avoidable costs, such as repairs and cancellations, identified in their invoice management processes, tracking back to where the issues originated from for example, incorrect Standard Settlement Instructions or booking inaccuracies by trading desks.
Data management still top of the agenda
Data continues to be the industry’s Achilles heel, but will people get their acts together in 2026?
During SIBOS, several Financial Institutions said they are struggling to reconcile rudimentary datasets, including Account and Counterparty information, either because there is a lack of standardisation at source or because the information is siloed across multiple entities or workstreams. Without access to good-quality data, the ability for firms to support Customers even with the most basic of services is called into question.
It also raises doubts about whether firms will be able to make good on their promises on Artificial Intelligence (AI). Just as Correspondent Banks are planning to embed AI into their KYC and AML processes to improve fraud detection and compliance, post-trade providers are trialling the technology in almost everything from Regulatory and Client reporting, all the way through to predicting trade fails.
A cardinal rule of life is that it is always prudent to walk before you can run. Before the industry commits to developing shiny, new AI solutions, it should probably spend 2026 making sure that its data foundations are fit for purpose.
Operational Resilience – the Risk paradigm keeps escalating
As interconnectivity and interdependencies increase across both Cash and Securities markets, the impact of outages and business interruptions is only going to get worse.
Even the simplest of glitches – a mundane maintenance issue, a server failure, an erroneous software update, or just plain human error can have devastating knock-on consequences in this technology-enabled ecosystem.
An operational incident at Swift in 2024, for example, temporarily forced UK CHAPS to go offline and resulted in T2 cutoff times being delayed. Meanwhile, a succession of outages at major Cloud Service Providers, e.g. AWS and other Critical Third-Party Service Providers have caused repeated disruptions across the Financial Services industry. In April 2025, the whole of Spain – including its Banking system came to an abrupt standstill (a notable exception, however, was the BME, the country’s Stock Exchange, which stayed open) after a nation-wide power cut.
Risk modellers are currently trying to guess what the next Black Swan scenario will be, but by far the biggest looming risk is cyber-crime. as anyone in the UK who was expecting a delivery from either one of Jaguar Land Rover, Marks & Spencer or The Co-op will attest.
Financial Services are a prime target for cyber-criminals.
Although IBM noted the average cost of cyber-breaches at Financial Institutions fell from $6.08 million to $5.56 million this year[5], the industry recognises that being hacked is still one of the most serious risks they face. According to the Bank of England’s latest Systemic Risk Survey, 86% of firms described cyber-attacks as the top risk to UK market stability, up 14% since H1, putting it ahead of geopolitical risk and an economic downturn. [6]
The problem is likely to deteriorate even further. Whilst new technologies such as AI can bring operational efficiencies, the technology can also be deployed to increase the capabilities of cyber-criminals. A number of organisations have issued alerts about prompt injections, a type of cyber-attack against Large Language Models (LLMs), whereby nefarious actors manipulate AI systems into providing proprietary or sensitive data, through malicious prompts. [7]This is not science-fiction, but science-fact – 13% of Organisations told IBM they experienced a cyber-security incident on an AI model in 2025. [8]
Expect outages and cyber-attacks to continue in 2026. The only way for Financial Institutions to mitigate these risks is by having robust and regularly tested Operational Resilience procedures and conducting thorough risk assessments on their Vendors, critical or otherwise.
[1] Swift – February 22, 2024- 5 reasons why you should adopt ISO 20022 now
[2] The Banker – December 3, 2025 – ISO 20022 rollout cost global banks up to $500mm each
[3] Firebrand Research – June 2025 – Tackling Post-trade Friction: Supporting a Global Shortened Settlement Cycle
[4] AFME – October 2025 – Analysis of CSD fees in major European markets
[5] IBM – Cost of a Data Breach Report 2025
[6] Bank of England- October 8, 2025 – Systemic Risk Survey Results H2 2025
