TCS BaNCS / Insights
overview
With a GDP larger than that of China and Japan combined and a daily trading volume of more than $5 billion, the United States has been and remains the world’s most important financial market, both in terms of participants and market infrastructure. A bull or bear rally in the Dow Jones Industrial Average triggers immediate reactions in the Nikkei, Hang Sang, Sensex and FTSE.
U.S. capital markets lead the world in size, influence and liquidity, with U.S. stocks accounting for over 38.5% of global market capitalization, a far larger share than any other region.
However, it is also important to highlight some counterintuitive aspects of this market.
- The USA only switched to instant payments in July 2023; In contrast, there are 89 billion instant payment transactions in India.
- The US stock market remains in a T+2 unwind cycle, while emerging markets have reached T+1.
- The US banking system still relies on memo posts while the rest of the world relies on real time.
The biggest challenge to modernization facing the U.S. financial services sector is the sheer volume of transactions and the billions of lines of code that have emerged over the decades based on outdated technology. This brings us to the critical responsibility of leading the financial services industry into the digital age. Financial technology providers must provide digital technology and risk-mitigating mechanisms to migrate data from the old to the new without damaging the pipes.
For over 25 years, TCS has had a strong presence in North America, addressing the critical needs of the U.S. financial services industry. In doing so, we introduced breakthrough concepts into the core technology used by leading US financial institutions, and the network effect forced other top players to either adopt TCS BaNCSTM or develop similar technologies.
TCS BaNCS began as a modern, future-ready solution offering real-time, event-driven, multi-currency, multi-lingual and multi-market capabilities. Our capabilities were unmatched in the industry when TCS BaNCS entered the US market, and those capabilities remain unmatched today.
Just over twenty years ago, we became a fintech partner for a top custodian and a top fund manager – both a household name and an American icon. In these initial engagements, we automated the processing of corporate actions, which required multiple handshakes from external data providers, processors and analysts within the bank, and constituents from client organizations. Through our efforts, we have implemented the necessary controls to protect banks and their customers from significant financial risks.
Since then, TCS BaNCS has never looked back. TCS BaNCS in North America expanded horizontally by acquiring dominant market share for our core asset servicing offering in corporate actions and custody, and vertically by advancing the value chain with wealth management and private banking solutions.
Today, the TCS BaNCS solution serves the three largest of the four U.S. banks and one of the three largest asset managers. TCS BaNCS has the unrivaled distinction of meeting the corporate actions processing requirements for all segments of the securities industry – asset managers, broker/dealers and custodian banks. We are the preferred choice of leading U.S. banks with a comprehensive range of asset servicing solutions.
TCS BaNCS customers benefit from the highest quality of service and highest STP rates. With TCS BaNCS for Corporate Actions, we have significantly reduced settlement failures and ensure the receipt of funds or securities from counterparties into customer accounts in the shortest possible time. High STP values also mean less manual intervention and a lower incidence of human error and the resulting financial losses. As part of automating operational processes, TCS BaNCS has also enabled customer self-service, allowing end customers to take control of their financial lives by managing their own transactions while ensuring non-repudiation and reducing errors for our financial institution customers.
TCS BaNCS’s real-time and STP capabilities have not only improved operational efficiency and reduced risk, but TCS BaNCS has also provided a competitive advantage for banks facing the daunting challenge of accelerated settlement cycles. For example, when SEC and DTCC initiatives shifted the industry from T+3 to T+2 in 2017, TCS BaNCS customers seamlessly managed the transition in a single weekend. The DTCC-led T+1 transition is scheduled for May 2024, and TCS BaNCS customers will be prepared for an equally rapid transition.
North American securities market strategy
Our overall strategy for the North American securities market focuses on the following four areas.
Comments are closed.