DTCC Looks Ahead to 2025 and Reflects on its Success in 2024

Reflecting on 2024, what were the Depository Trust and Clearing Corporation’s (DTCC) key achievements? 

We named 2024 DTCC’s “Year of Execution” given our imperative to execute our agenda. The most compelling achievement this year was the successful conversion to T+1 in North America. This was a historic change to market structure that delivered the benefits we promised, including higher affirmation rates, reduced margin requirements and a lower clearing fund, which dropped by $3 billion. This represented a decline of 23 percent over three months when compared to a T+2 environment. 

We also made good progress in advancing our digital asset efforts. We rolled out two key solutions – Launchpad, our industry sandbox for digital asset experimentation, and LedgerScan, which enables our clients to integrate digital asset data into their legacy systems. This gives us an incredible runway to usher in the digital marketplace of the future.  

In addition, we achieved several key milestones in our Core Clearance & Settlement modernisation program and bolstered our technology stack. These are critical efforts that will improve the client experience and strengthen our operational resiliency, risk management and regulatory compliance.  

Looking ahead to 2025, what will be the biggest opportunities for your firm and the industry?  

2025 will largely be a continuation of 2024 in that we must continue to execute large-scale industry implementations. On the heels of the smooth T+1 conversion, we will galvanise the industry and provide strong leadership on the transition to the SEC’s US Treasury Clearing rule. 

In addition, innovation will be an area of sharp focus for our firm. We’ve been integrating digitisation, cloud and AI into our capabilities and we’ll continue to advance this important work in the coming years. However, we also recognise that not all innovation will be underpinned by technology, which means that we’ll also focus on opportunities to improve market safety and efficiency through process enhancements, cross-margining agreements and other creative approaches.  

I’m very excited for DTCC to serve as a strategic partner to the industry by advancing acceptance and adoption of digital assets. . Our company is becoming a key player in the digital ecosystem and the industry is eager to work with us.  

In addition, we’ve brought together two of our largest peers globally – Clearstream and Euroclear – to develop a framework for establishing standards, procedures and governance in a digital environment. We look forward to our continued partnership in 2025. 

2025 will bring change as the geopolitical and macroeconomic landscape evolves. How will DTCC adapt to the shifts we expect to see in the operating environment? 

In 2024, we saw considerable changes in the political  landscape. As a new administration in the US takes office, we’re planning ahead to adapt to shifts in financial and regulatory policymaking that may impact the global markets and DTCC’s business.   

At the same time, we’re continuing to monitor a wide range of geopolitical and macroeconomic issues. While geopolitical risk will likely continue to outpace economic risks for the foreseeable future, we recognise that economic issues, coupled with ongoing cost constraints and growing regulatory and cybersecurity needs, put additional pressure on firms. Regardless, we will continue to focus on serving as our clients’ strategic partner and help them navigate this confluence of dynamics.  

Technology is playing a significant role in shaping the financial markets. How is DTCC leveraging technology and innovation to lead the industry through the next iteration of market structure transformation?   

Technologies such as blockchain and the cloud will play a crucial role in the digital financial ecosystem. Launchpad, our DLT industry sandbox, is a multi-chain technology platform. We’re very focused on opportunities to tokenise collateral and funds. Leveraging our existing clearing and settlement capabilities, we’re working to facilitate the listing of digital funds on exchanges as well as secondary trading. 

AI is a frontier that will transform financial services, enhancing market efficiency, risk management and liquidity. AI’s ability to process vast amounts of data can help markets operate more quickly and efficiently. The technology’s capability for predictive analytics can make a meaningful impact in how we analyse historical data, learn from patterns and expedite access to data. We’re already using AI where it will be beneficial to the client experience.  

We believe these new technologies will introduce more efficiency in the markets, reduce costs and mitigate risks. Financial services will become more interconnected, efficient and inclusive than ever before, and DTCC will be the strategic partner and thought leader to steer the industry through this transformation.