Under T+1, the entire post-trade window compresses to five hours. The real complexity is not speed, it is the interconnectedness of the workstreams that must all complete within it. A stale SSI, a missed CLS cut-off, a delayed collateral substitution: each failure cascades across the chain, resulting in fails, penalties, and liquidity strain no single team can absorb in isolation.
Europe faces a structurally harder version of this transition than the US or Asia. Fragmented CSDs, multi-currency flows, and manual-heavy processes mean the friction points are deeply embedded. Only 65% of EU settlement instructions match on trade date today. Up to 40% of large firms still rely on manual SSI processing. CLS will not adjust its cut-off timelines. And freed collateral from lower margin requirements largely gets reabsorbed as operational buffer, not returned to firms.
What you will find in this insight
The second in Cognizant and Microsoft’s series on EU T+1 modernisation maps the depth and interconnectedness of challenges across collateral management, Target2-Securities, standard settlement instructions, partial settlement, and FX and explains what firms must address before October 2027.
