The true scale of the opportunity
The financial implications are stark, with avoidable industry costs exceeding $15 billion annually. Recent surveys indicate direct annual processing costs to investors average around USD14 million per firm, with indirect costs multiples higher. Errors and delays resulting from manual processes, inconsistent data, and poor communication have resulted in error rates as high as 5% for voluntary and mandatory events, creating additional costs of approximately $5.2 billion annually in rectification alone. As one operational lead at an investment bank noted, “Our costs and operational risks grow exponentially every time manual intervention is required, putting investor confidence and regulatory compliance at risk.”
Golden copy data could return USD15 billion to individual investors’ portfolios (USD259 per US investor) per annum
The golden opportunity: Standardization and the "golden source"
Addressing these inefficiencies lies in adopting standardized, real-time data practices managed centrally, ideally positioning DTCC as a trusted, centralized "golden source" utility. By ensuring data accuracy, standardization, and timeliness, the industry could eliminate a substantial volume of existing manual interventions and significantly reduce associated errors. We could see a reduction of costs related to announcement capture, due to less need for revalidation, less requirement for event enrichment, and potentially less need for second sourcing, by having a trusted accurate source of data at the top of the chain.
Avoidable corporate action lifecycle processes
Avoidable errors with golden source event data
Research suggests potential reductions of up to 74% in manual interactions per event and as much as an 87% decrease in processing errors through standardized, automated data flows. The resultant financial savings are substantial, estimated at approximately $15 billion annually for investors alone. A senior practitioner at a global custodian noted, “Standardized data isn't just a nice-to-have; it’s essential to our future operational efficiency and maintaining investor trust.”