Chapter 1: The Backdrop
2. Automation and the trust challenge
Why is automation going into reverse?
Perhaps the most alarming finding of our 2025 research is that automation is not compounding, instead, it is fragmenting.
While technology providers and custodians show automation improvements of 65% - 90%, 60% of brokers report a decline in automation rates over the last 12 months increasing error rates.
Europe is particularly hard hit – with automation levels down 37% year on year, a surprising result in a region with market standards and regulation demanding STP and automation. This decline raises tough questions. However, there is a positive for Europe: Spain’s automation rates have increased by 51% year on year, standing out as Europe’s only clear success story.
Meanwhile, one cross-market issue remains lacking in the asset servicing automation debate: securities lending.
The majority of brokers are seeing their automation levels decline…
Not forgetting the recall problem
Securities lending remains a major yet often overlooked variable in the asset servicing equation. Roughly $3 trillion of securities are on loan each day, and each one is subject to corporate actions, yet the intersection between lending and asset servicing remains largely manual and fraught with risk.
This operational gap stems from the manual and opaque recall process lenders use to reclaim shares for voting rights, which forces a trade-off between revenue and governance. With around 35 corporate event types impacting lending workflows, the absence of robust automation infrastructure introduces substantial inefficiency and operational exposure, leaving a critical blind spot in the industry’s modernisation agenda.
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Dividend related corporate actions remain under review and demand ongoing attention."
Roy Zimmerhansl, Head of Capital Markets, WTS Hansuke
The trust gap
In an age of AI, APIs and DLT, how can automation be slipping backwards? The issue is not due to a lack of prioritisation and investment or a failure of technology’s capabilities; it is a failure of trust. In fact, trust in data is emerging as a major barrier to full automation.
Custodians and brokers often do not trust the event notifications they receive. Upstream data from issuers, transfer agents, and intermediaries is frequently fragmented, inaccurate, or late. A single error in a ‘golden record’ field can cascade into multimillion-dollar losses. Fixing data quality must be the single biggest multiplier for STP success.
To protect themselves, firms are inserting manual checks to compensate, putting people back into the loop to verify what the systems are producing.
This creates a paradox: as volumes rise and events become more complex, firms are reducing STP to safeguard against errors and losses. They are trading efficiency for safety.
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High-risk transactions need manual controls. We cannot let a $10 million error go out the door just because the system said so."
Product Executive, Global Custodian
