Chapter 1: The Backdrop
3. Data – the cost-intensive weakest link
The asset servicing industry is right to be cautious as errors and costs increase.
Data issues are front and centre …
Data drives both progress and pain. Our survey findings show that up to 67% of all asset servicing errors are due to poor or inconsistent event data.
Bad data equals bad outcomes for all event types with class actions, mandatory and voluntary events the biggest hit at 67%, 64% and 57% respectively.
The financial impact of errors is significant and growing. As highlighted in our 2024 Asset Servicing Automation Report, operational errors can represent up to 10% of total running costs for some firms. Looking ahead, the hidden burden of thousands of staff-hours spent scrubbing, validating, and reconciling data from multiple vendor feeds will be even higher - only to arrive at a golden copy that should exist at the source.
Back to the 25% increase in asset servicing volumes - this makes current models even more unsustainable. Data sourcing and validation are now the fastest growing costs for almost every event type. Something has got to give.
What is driving these errors? Up to 67% of errors are driven by data issues
…and the fastest growing cost for almost every asset servicing activity
An astonishing 50% of respondents cite data sourcing as the fastest growing cost for mandatory corporate action events, 12% greater than event processing itself. When you consider that 64% of errors are due to data issues, this is a poor return on investment. The same imbalance appears in other events: with income showing 48% cost / 48% data issues and voluntary events showing 45% cost / 57% data issues.
Data is the inherent weakness that the industry needs to solve. For 51% of investors, it is the main cost driver and means that end investors are being dealt an injustice by having to bear the cost of inefficiency.
The cost divide is clear: investors and brokers spend most on data sourcing, custodians on event processing; both are symptoms of the same root problem – data fragmentation.
While investors and brokers face growing costs in data sourcing and validation at 51% and 50% respectively, 47% of custodians are seeing event processing as their biggest growing cost. For custodians, the pressure to provide timely and accurate information and outcomes creates constant tension. Data scrubbing and correction of non-standard messaging feeds have become routine for custodians just to maintain service levels and limit errors. The same pattern appears among 52% of exchange and technology providers, confirming that data and process weaknesses run through the entire post-trade chain.
Data sourcing costs are the fastest growing cost for almost every asset servicing activity
The cost of errors
Survey findings reveal some encouraging signs as aggregate errors are falling across all the event types examined. However, the most complex events still drive persistent losses. Tax reclaims and mandatory events show declines of 24% and 17% respectively, yet both also record isolated 6-10% increases.
In contrast, income events remain volatile: 12% of firms report serious escalations, including 4% experiencing increases between 11-20%. Similarly, voluntary corporate action events show a similar pattern, with 16% of firms reporting higher error rates.
Whilst the financial toll is clear (in 2025, 91% of firms incurred losses of up to $100K) financial loss is only one part of the cost. Reputational damage compounds competition pressure, reinforcing the strategic imperative to improve accuracy and automation.
Our industry experts note that whilst standardised, low-risk events (like cash dividends) typically achieve automation rates of 90-95%, complex, voluntary events still trail below at 85% or lower. The sheer variability of these events such as rights issues, tender offers and proxy events means that ‘edge cases’ are the norm, not the exception and the trained asset servicing eye is the costly insurance policy.
Nonetheless, with shrinking budgets and expanding volumes, manual controls simply cannot scale. Income‑event automation remains a blind spot. Without decisive automation and data modernisation, errors, risk, and cost will continue to rise.
Voluntary events are not scaling and 12% of firms are seeing serious escalations in income event errors
