Japanese regional lender Higo Bank has adopted Depository Trust & Clearing (DTCC)’s institutional trade processing (ITP) services to automate its middle and back office functions.
DTCC serves as post-trade market infrastructure for the financial services industry.
Higo Bank’s latest move is aimed at enhancing efficiency in achieving no-touch processing across domestic and cross-border transactions.
Higo Bank, which is based in Kumamoto Prefecture, selected DTCC’s central trade manager (CTM) for this purpose. This includes CTM’s match to instruct (M2i) workflow, ALERT, and settlement instruction manager.
These solutions will help the Japanese bank automate its post-trade processing of equities and fixed income transactions.
Higo Bank financial markets division senior executive officer and general manager Kazuyoshi Uchiyama said: “The global focus on shortening settlement cycles, as well as the need to comply with the operational risk measurements set by the Basel Accords to enhance internal controls and strengthen human capital, has made straight through processing essential across operational workflows, from trade execution to settlement.”
Furthermore, the adoption of DTCC’s ITP services will streamline Higo Bank’s trade confirmation processes, creating a more efficient and cost-effective system.
By reducing manual touchpoints, the bank expects to significantly accelerate its post-trade operations.
The integration of these services comes at a time when global markets prepare for a potential move to T+1 settlement following the transition in the US in May 2024, said DTCC.
The M2i workflow within CTM facilitates trade affirmation and the automatic delivery of instructions for Depository Trust Company (DTC)-eligible securities directly to the US depository for settlement.
Additionally, when combined with the settlement instruction manager, users can automatically generate and send settlement instructions to custodians and other third parties.
DTCC ITP managing director and general manager Val Wotton said: “We are happy to collaborate with Higo Bank in bringing greater post-trade processing efficiency to the region.
“ITP’s functionality is unique in its ability to enable counterparties to reach settlement finality faster, while also connecting to thousands of global counterparties.”
