Author: Loffa Interactive Group

The Compliance Challenge: Managing Risks in T+1 Settlement Operations

In the swiftly changing financial markets, operational efficiency is not just a bonus—it’s a necessity, particularly with the transition to T+1 settlement cycles looming on the horizon. This impending shift is set to redefine the landscape of financial transactions, impacting risk, liquidity, and the overall pace of market operations. Today, we explore how brokerages can harness operational efficiency to secure a competitive advantage in this evolving era, focusing on time zone prioritization and the intricate roles in exception processing.

The transition from T+2 to T+1 is not merely a regulatory update—it signifies a strategic evolution aimed at enhancing market efficiency and reducing risk exposure. For brokerages, this change necessitates a substantial revision of internal processes to effectively manage faster settlements. A critical strategy for managing this transition effectively is time zone prioritization, ensuring that teams in different regions are available to handle exceptions as they arise, optimizing the resolution process from Asia through to North America.

The Realities of T+1 Operational Window

While the concept of T+1 suggests a full 24-hour cycle, the actual operational window for processing transactions is considerably narrower—typically around 5 hours. This limited timeframe is due to the need for synchronizing with global banking hours, during which transactions can be cleared and settled. Understanding this constraint is crucial for brokerages as they adapt their workflows and operations to meet the accelerated pace without compromising on accuracy or compliance.

Pathways to Enhanced Operational Efficiency

Improving operational efficiency in a T+1 environment involves several key strategies:

• Streamlining Processes: Tightening workflows is crucial. This includes reducing manual interventions, enhancing automation, and ensuring every step from trade execution to settlement is optimized for speed and reliability.
• Embracing Technology: Technologies like AI and machine learning are indispensable in speeding up decision-making processes, from risk assessment to compliance checks, all tailored to fit within the tight T+1 deadlines.
• Mastering Data Management: Efficient data handling becomes even more critical in a T+1 context. Systems must be robust enough to process higher volumes of transaction data swiftly and accurately, supporting timely and informed decision-making.

Compliance: Your Operational Backbone

With the reduced settlement period of T+1, the margin for error narrows significantly. Efficient, automated compliance systems become indispensable, performing real-time checks to ensure all transactions meet stringent regulatory standards. This not only helps avert fines but also enhances your firm’s reputation, bolstering trust among clients and investors.

Perspectives on Exception Processing

Different market participants face unique challenges in a T+1 environment:

• Buy Side: Focuses on ensuring that trade instructions are clear and settlements are confirmed quickly to avoid delays.
• Sell Side: Manages higher transaction volumes and must ensure efficient trade confirmation and robust risk management to handle exceptions swiftly.
• Custodian Broker: Ensures the safekeeping and accurate settlement of securities, maintaining precise records and timely transaction processing.
• Executing Broker: Requires real-time monitoring systems to ensure compliance with market regulations and client mandates, allowing for quick discrepancy resolution.

The High Stakes of Non-Compliance

In the fast-paced environment of T+1 settlements, the margin for error in compliance is significantly reduced. Here are some specific examples of exception handling issues that need diligent attention to mitigate risks:

1. New Accounts and KYC Compliance: When opening new accounts, the Know Your Customer (KYC) process is crucial to verify the identity of clients and assess potential risks. Missing or incomplete KYC processes can lead to severe regulatory penalties and damage the trust relationship with clients.
   • Regulation: Bank Secrecy Act, USA PATRIOT Act
   • Purpose: Prevent money laundering and terrorist financing.
2. Trade Matching for Economic Details: Ensuring that the trade details match economic realities is vital for maintaining market integrity. Discrepancies in trade details can lead to failed settlements, financial loss, and regulatory scrutiny.
   • Regulation: FINRA Rule 2232 (Customer Confirmations), SEC Rule 10b-10
   • Purpose: Ensure accuracy of trade details and transparency to the client.
3. Affirmations and Confirmations: Quick and accurate affirmation and confirmation of trades are essential in a T+1 environment. Delays or errors in this process can lead to unsettled trades and subsequent financial penalties.
   • Regulation: SEC Rule 15c6-1 (Mandatory Three-Day Settlement Cycle)
   • Purpose: Ensure timely and accurate settlement of securities transactions.
4. Swift Messages Accuracy: Swift messages, which facilitate the exchange of information about financial transactions, must be precise and timely. Errors in Swift messages can cause delays and misunderstandings, leading to compliance failures.
   • Regulation: Various global standards and protocols, e.g., ISO 20022
   • Purpose: Ensure accurate and efficient communication in international financial transactions.
5. Inventory Management: Proper tracking of securities inventory ensures that there are no discrepancies between recorded and actual holdings, preventing potential fraud or misplacement.\
   • Regulation: Various global standards and protocols, e.g., ISO 20022
   • Purpose: Ensure accurate and efficient communication in international financial transactions.
6. Account Adjustments: Moving or splitting accounts and updating SSIs must be handled with extreme care. For SSIs, particularly, manual call-back procedures to verify changes are a critical step to prevent fraud and ensure accuracy.
   • Regulation: FINRA Rule 4511 (General Requirements), SEC Rule 17a-3
   • Purpose: Ensure accuracy and authorization of account transactions and adjustments.
7. Trade Breaks: Handling mismatches between trade details reported by different parties. Quick resolution is crucial to prevent failed deliveries.
   • Regulation: SEC Rule 15c3-1 (Net Capital Rule)
   • Purpose: Prevent brokerage firms from becoming overly leveraged, ensuring they can cover trade settlements.
8. Failed Deliveries: Addressing failures in the delivery of securities, possibly due to insufficient funds or securities. This requires immediate attention to prevent settlement failure.
   • Regulation: SEC Rule 204 of Regulation SHO
   • Purpose: Reduce the number of settlement failures, specifically addressing fail-to-deliver issues.
9. Margin Requirements: Ensuring all margin calls are met on time, especially in volatile markets, to prevent liquidations.
   • Regulation: FINRA Rule 4210 (Margin Requirements)
   • Purpose: Ensure proper maintenance of margin accounts to prevent excessive borrowing based on securities held
10. Corporate Actions: Managing exceptions related to dividends, mergers, splits, and other corporate actions that affect asset valuations and holdings.
    • Regulation: Various exchange rules and corporate laws
    • Purpose: Ensure that corporate actions are processed accurately and shareholders’ rights are maintained.
11. Duplicate Transactions: Detecting and resolving duplicate entries that can arise from multiple inputs or system errors.
    • Regulation: General auditing and compliance standards
    • Purpose: Prevent fraud and errors in financial reporting.
12. Reconciliation Errors: Addressing discrepancies that arise during the reconciliation of accounts and ledgers, which are critical in a T+1 environment to ensure all accounts are accurate and up-to-date.
    • Regulation: Sarbanes-Oxley Act Section 404
    • Purpose: Enhance financial reporting accuracy through internal control provisions.
13. Regulatory Alerts: Managing exceptions triggered by regulatory surveillance tools that monitor for unusual or potentially fraudulent activity.
    • Regulation: Various laws concerning market manipulation and insider trading, e.g., Securities Exchange Act of 1934
    • Purpose: Monitor and prevent unfair trading practices and market manipulation.
14. Client Instructions Non-adherence: Handling situations where trades do not align with client instructions, such as buying or selling outside authorized limits.
    • Regulation: FINRA Rule 4512 (Customer Account Information)
    • Purpose: Ensure that investment activities align with client instructions and profiles.
15. Foreign Exchange Issues: Managing currency mismatches in trades involving multiple currencies, which can affect settlement unless swiftly corrected.
    • Regulation: Dodd-Frank Wall Street Reform and Consumer Protection Act (Title VII)
    • Purpose: Regulate and provide transparency to the foreign exchange markets.
16. Technical Errors: Addressing system malfunctions or connectivity issues that affect trade execution or data integrity.
    • Regulation: General IT governance standards like COBIT, ISO/IEC 27001
    • Purpose: Ensure information security and proper functioning of IT systems within financial firms.
17. Prime Broker documentation, such as an F1SA (Form 1 Schedule A) not being in place when a trade for a new account is created 9or SIA150 and 151), falls under a few categories related to exception handling:
    1. Account Adjustments:
       • Context: This involves ensuring that all necessary agreements and documentation are properly set up and validated before executing any trades. In the context of Prime Brokerage, ensuring that an F1SA is in place is critical to defining the terms of the relationship, including services provided, fees, and responsibilities.
       • Regulation: Compliance with FINRA and SEC rules regarding the maintenance and preservation of accurate records and agreements.
    2. Compliance:Context: Handling trades without the proper documentation breaches compliance requirements. Regulatory bodies require that all broker-dealer relationships and transactions adhere to established legal frameworks to protect all parties involved.
       • Regulation: This could come under various regulatory requirements like FINRA Rule 4511 or SEC Rule 17a-3 and 17a-4, which mandate the creation and preservation of accurate records and documentation.
    3. Client Instructions Non-adherence:
       • Context: If the trade is executed without the required F1SA, it might also violate specific client instructions or agreement terms stipulated in the client-prime broker relationship.
       • Regulation: Violation here could be seen under FINRA Rule 4512, which requires that transactions and account management adhere to the terms agreed upon with the client.

    Regulatory Alerts and Risk Management categories might also indirectly relate to this issue, as lacking the required documentation can expose the brokerage to regulatory actions and increase the risk of legal or financial penalties.

    To prevent such issues, it is crucial for brokerages to implement robust control mechanisms within their operational workflow to ensure that all necessary documentation is reviewed and in place before proceeding with any trades, especially in new accounts. This could involve automated checks or compliance approval processes integrated into the trade lifecycle management system.  Please request a demo of Loffa’s PBIN suite.

The consequences of non-compliance in these areas can be dire. They range from financial penalties and increased regulatory scrutiny to reputational damage that can affect a brokerage firm’s ability to operate effectively in the market. In worst-case scenarios, systemic non-compliance can lead to the suspension of trading privileges or the revocation of licenses.

To mitigate these risks, brokerages must implement robust compliance frameworks that are capable of handling the increased operational demands of T+1 settlements. This involves investing in technology solutions that can automate and streamline compliance checks, ensuring that nothing is overlooked even as transaction volumes and speeds increase.

By emphasizing compliance as a core component of operational strategy, brokerages not only protect themselves against the risks of non-compliance but also position themselves as trustworthy and reliable partners in the financial marketplace. This commitment to compliance can become a significant competitive advantage, attracting clients who value security and regulatory adherence.

Leveraging SaaS to Enhance Cost Efficiency in Settlement Workflows

In the evolving landscape of financial markets, particularly with the shift towards T+1 settlements, adopting SaaS solutions emerges as a strategic move to boost operational efficiency and drive cost savings. SaaS platforms offer scalability, reduced maintenance costs, and seamless updates, providing brokerages with advanced tools necessary for thriving in a fast-paced trading environment.

Conclusion

As the T+1 settlement standard approaches, operational efficiency transcends from being a beneficial strategy to a critical necessity for survival and success. Brokerages that view this shift as an opportunity to streamline their operations and embrace new technologies are poised to lead the market. In the new landscape of financial transactions, operational efficiency, supported by strategic time zone management and robust exception handling, becomes a pivotal asset, driving growth and ensuring resilience against the rapid pace of industry evolution.

Transforming Brokerage Operations: How SaaS Solutions Drive Efficiency and Enhance Security

In the swiftly changing financial markets, operational efficiency is not just a bonus—it’s a necessity, particularly with the transition to T+1 settlement cycles right around the corner. This shift is poised to redefine the landscape of financial transactions, impacting risk, liquidity, and the overall pace at which the markets operate. Today, let’s explore how brokerages can harness operational efficiency to secure a competitive advantage in this new era.

Understanding the Shift to T+1

Transitioning from T+2 to T+1 isn’t merely a regulatory change—it’s a strategic evolution designed to increase market efficiency and reduce risk exposure. For brokerages, this means a significant overhaul of internal processes to handle faster settlements effectively. How can your firm prepare to thrive under these tighter timelines?

Pathways to Enhanced Operational Efficiency

Enhancing operational efficiency in a T+1 environment involves several key strategies:

1. Streamlining Processes: It’s time to tighten up those workflows. This means reducing manual interventions, enhancing automation, and ensuring that every step from trade execution to settlement is as efficient as possible.
2. Embracing Technology: Technologies like AI and machine learning aren’t just fancy tools—they are essentials in speeding up decision-making processes, from assessing risks to ensuring compliance, all within the tight T+1 deadlines.
3. Mastering Data Management: In a T+1 world, handling data efficiently is more critical than ever. Systems need to be robust enough to process increased volumes of transaction data quickly and accurately to support timely and informed decision-making.

Compliance: Your Operational Backbone

The reduced settlement period of T+1 leaves little room for error. Efficient, automated compliance systems are vital, performing real-time checks to ensure all transactions meet regulatory standards. This not only helps avoid fines but also boosts your firm’s reputation, enhancing trust among clients and investors.

The Pivotal Role of Compliance in Operational Efficiency

As the financial industry gears up for the T+1 settlement era, compliance emerges as a central pillar in maintaining and enhancing operational efficiency. With tighter turnaround times for settlements, the margin for error shrinks significantly, placing a premium on having robust compliance mechanisms that do more than just prevent violations—they drive efficiency.

Compliance as a Catalyst for Streamlining Operations

1. Real-Time Monitoring Systems: In the T+1 framework, delays in identifying compliance issues can lead to failed settlements and severe penalties. Implementing real-time monitoring systems allows brokerages to detect and rectify compliance issues instantly, ensuring that transactions are both compliant and timely. This real-time capability not only mitigates risk but also enhances the speed of transaction processing.
2. Integrated Compliance Solutions: By integrating compliance checks directly into the transaction and settlement processes, firms can eliminate the need for retrospective audits that slow down operations. For example, integrating automated compliance software that aligns with SEC regulations and continuously updates with changes can keep transactions flowing smoothly without manual intervention.
3. Data Integrity and Accuracy: Effective compliance depends on the accuracy and integrity of transaction data. In a T+1 environment, ensuring data quality becomes critical as the input directly impacts compliance outcomes. Investing in systems that provide real-time data validation and cleansing will bolster compliance efforts and reduce the likelihood of transaction disputes or regulatory fines.

Compliance as a Strategic Advantage

Beyond just meeting regulatory requirements, proactive compliance can be a significant competitive advantage. Here’s how:

• Risk Mitigation: By identifying potential compliance issues before they result in fines or reputational damage, firms can operate more confidently and aggressively in their market activities.
• Investor Confidence: Firms known for stringent compliance practices are more attractive to investors, who value the reduced risk associated with well-regulated operations.
• Market Leadership: By setting high standards for compliance, firms can lead by example, influencing industry practices and setting themselves apart as leaders in operational integrity.

Adapting Compliance for T+1

Transitioning to T+1 requires a reevaluation of existing compliance frameworks. Firms must consider the following adjustments:

• Scaling Technology: Upgrading technological infrastructure to handle increased data flows and integration with real-time compliance tools.
• Training and Development: Continually educating compliance and operational teams on the nuances of T+1 regulations and the importance of swift compliance integration into daily workflows.
• Collaboration with Regulators: Engaging with regulatory bodies to understand expectations and receive guidance on effective compliance practices in a T+1 landscape.

From Theory to Practice: A Case Study

Imagine a brokerage that anticipated the T+1 change and proactively upgraded its systems. By adopting scalable tech solutions and integrating advanced analytics, the firm didn’t just adapt to the new settlement cycle—it improved its operational efficiency by 30%, enhancing client satisfaction and expanding its market presence.

Building an Efficiency-First Culture

Technology and processes are pivotal, but so are the people. Cultivating a culture that values efficiency, continuous improvement, and agility in adopting new technologies can significantly enhance your firm’s ability to manage and benefit from changes.

Looking Ahead

As the T+1 settlement standard approaches, operational efficiency is more than a beneficial strategy—it’s essential for survival and success. Brokerages that view this upcoming shift as an opportunity to streamline their operations and invest in new technologies will likely lead the pack. In the new landscape of financial transactions, operational efficiency is your strategic asset, driving growth and ensuring resilience in the face of industry evolution.

Leveraging SaaS to Enhance Cost Efficiency in Settlement Workflows

In the evolving landscape of financial markets, especially with the shift towards T+1 settlements, the adoption of SaaS solutions stands out as a strategic move to enhance operational efficiency and drive cost savings. SaaS platforms offer numerous advantages that traditional software systems cannot match, particularly in terms of scalability, maintenance, and integration.

Cost-Effective Scaling and Maintenance

1. Reduced Infrastructure Costs: SaaS solutions are hosted in the cloud, which significantly reduces the need for brokerages to invest in and maintain costly IT infrastructure. This shift not only lowers capital expenditures but also cuts ongoing costs related to hardware maintenance and upgrades.
2. Pay-as-You-Go Pricing Models: Many SaaS providers offer flexible pricing models based on usage, which allows brokerages to pay only for the capacity and features they need. This scalability is particularly beneficial in a T+1 environment, where transaction volumes can fluctuate, requiring dynamic scalability that traditional systems may not handle cost-effectively.
3. Automated Updates and Upgrades: SaaS solutions automatically update to ensure all users have the latest features and compliance updates without additional costs or system downtime. This continuous improvement cycle ensures that brokerages can always operate with the most advanced tools without the need for manual interventions or costly customizations.
4. High Maintenance Costs: Maintaining robust security measures in-house can be prohibitively expensive. Brokerage firms must not only invest in initial security infrastructure but also bear the ongoing costs of updates, patches, and security personnel. Over time, these costs can accumulate significantly, particularly as security threats become more sophisticated.
5. Compliance and Audit Costs: For brokerages developing in-house solutions, the inclusion of these systems in SOC 2 audits, quarterly software security scans, and annual penetration tests is essential but often overlooked in cost assessments. Each of these activities requires substantial resources, both in terms of time and finances, to ensure compliance with industry regulations and standards.
6. Resource Allocation: Devoting resources to developing and maintaining security measures for in-house solutions can divert attention from core business activities. This not only impacts the efficiency of operations but also leads to higher costs as firms struggle to balance security needs with operational demands.

Streamlined Operations and Reduced Error Rates

1. Enhanced Workflow Automation: SaaS platforms can automate key steps in the settlement process, such as trade confirmation, record reconciliation, and compliance checks. This automation reduces the manpower needed for these tasks and minimizes human errors, which can be costly in terms of both rectification efforts and potential regulatory fines.
2. Integrated Compliance Tools: Compliance with the evolving regulatory landscape is streamlined through integrated tools provided by SaaS platforms. These tools are updated in real-time to reflect the latest regulatory changes, ensuring that brokerages remain compliant without the need for constant monitoring or manual intervention. This integration not only saves costs but also protects against compliance-related financial risks.

Additional Advantages of SaaS: Enhanced Security and Overlooked Cost Savings

While the operational and financial benefits of SaaS are clear, security is another crucial advantage that SaaS solutions provide, particularly in the context of the stringent security requirements in the financial services industry.

Enhanced Security Measures

1. Robust Security Protocols: SaaS providers typically invest heavily in security measures that adhere to the highest industry standards, including advanced encryption techniques, secure data centers, and regular security audits. These measures ensure that data is protected against breaches, which is paramount for brokerage firms handling sensitive financial information.
2. Continuous Security Updates: Unlike traditional in-house systems where updates may lag, SaaS platforms continuously update their security measures to counter new threats. This proactive approach ensures that security protocols are always at the cutting edge, safeguarding against vulnerabilities that could lead to costly data breaches.

The security benefits and cost savings associated with SaaS solutions make them an attractive alternative to in-house systems, especially for brokerage firms that must adhere to rigorous security standards while managing costs effectively. By outsourcing the security and maintenance of their settlement systems to specialized SaaS providers, brokerages can not only ensure high levels of security but also free up resources to focus on strategic activities that drive business growth. This shift not only enhances operational security but also provides a more cost-effective solution to the ongoing challenge of cybersecurity in the financial sector.

In the dynamic world of financial services, brokerages continually search for ways to enhance efficiency and reduce operational costs. Leveraging innovative technologies plays a pivotal role in this quest, driving significant transformations across brokerage operations.

Embracing Automation for Operational Efficiency

Automation has revolutionized traditional brokerage functions, allowing for the streamlining of repetitive tasks such as data processing and compliance monitoring. This shift not only accelerates workflows but also reallocates human resources to focus on strategic initiatives.

Real-Life Impact: For instance, many brokerages have adopted automated systems for trade execution, which reduces the time to complete transactions and minimizes the potential for human error, significantly enhancing operational reliability.

Harnessing the Power of Data Analytics

Advanced analytics powered by AI provide deep insights into market behaviors and client needs, empowering brokers to make data-driven decisions. These tools analyze patterns in vast datasets to forecast market trends and advise on portfolio adjustments.

Utilization Example: A brokerage utilizing AI-driven analytics can identify emerging market opportunities in real-time, offering clients timely investment advice that aligns with their risk profiles and investment goals.

Leveraging Cloud Technology for Flexibility

Cloud computing offers brokerages scalable and secure environments for data storage and management, facilitating seamless access to information and collaboration across geographical boundaries.

Case in Point: By integrating cloud-based platforms, brokerages can enhance their operational agility and responsiveness, enabling real-time updates and support regardless of location.

Streamlining Compliance with RegTech

Regulatory technology simplifies adherence to financial regulations through automation, significantly reducing the complexity and cost associated with compliance management.

Application Insight: Automated tracking and reporting tools not only ensure compliance but also streamline the audit processes, making it easier for brokerages to maintain transparency with regulatory bodies.

Prioritizing Cybersecurity in a Digital Age

As digital interactions increase, so does the risk of cyber threats. Investing in state-of-the-art cybersecurity measures is essential to protect sensitive client information and maintain trust.

Security Focus: Implementing multi-factor authentication and continuous monitoring systems can prevent unauthorized access and detect potential security breaches early.

Maximizing Efficiency with Automated Workflows in the T+1 Transition

As the financial industry moves towards a T+1 settlement cycle, the imperative for brokerages to streamline every aspect of their operations becomes increasingly critical. Automated workflows stand at the forefront of this transformation, offering a robust solution to enhance efficiency and accuracy in the face of tighter turnover times.

The Role of Automated Workflows in T+1 Settlement

Streamlined Processing: Automated workflows help brokerages manage the increased pace of transactions under T+1 by automating routine tasks such as trade matching, confirmation, and settlement instructions. This not only speeds up processing but also minimizes the risk of errors that can lead to trade failures or delays.

Enhanced Compliance Monitoring: With the reduction in the settlement period, there is less time to address compliance and reporting discrepancies. Automated workflows integrate real-time compliance checks that monitor transactions against regulatory requirements, ensuring that all trades are compliant as they are processed. This continuous compliance monitoring is vital in avoiding penalties and maintaining regulatory integrity.

Optimized Liquidity Management: The acceleration of settlement processes demands more dynamic liquidity management strategies. Automated workflows provide timely data and analytics to forecast cash flow and liquidity needs more accurately. This enables brokerages to make informed decisions on asset allocation and funding strategies, crucial for maintaining liquidity in a fast-paced trading environment.

Improved Risk Management: Automated risk assessment tools embedded within workflows can instantly analyze the potential impact of trades across various scenarios, providing brokers with immediate feedback on risk exposure. This rapid assessment is essential for making prudent decisions in a market where reaction times are significantly shortened.

Implementing Automated Workflows

To successfully implement automated workflows, brokerages need to focus on several key areas:

1. Integration with Existing Systems: Automated workflows must seamlessly integrate with existing trading platforms and back-office systems to ensure that data flows smoothly across all processes without manual intervention.
2. Scalability: As trading volumes increase and new regulations come into play, automated systems should be scalable to accommodate growth and changes without requiring extensive redesigns or updates.
3. Training and Adaptation: Employees need to be trained not only on how to use new automated tools but also on how to intervene when exceptions occur. The shift to automated workflows represents a cultural change in how daily operations are managed.
4. Continuous Improvement: Leveraging AI and machine learning within automated workflows can help in continuously improving the processes based on new data and evolving market conditions. This adaptive capability is crucial for staying competitive in a rapidly changing financial landscape.

The transition to T+1 presents both challenges and opportunities for brokerages. Automated workflows are a cornerstone technology that can transform the speed and reliability of post-trade processes, driving the efficiency and compliance needed in the new settlement landscape. By embracing these technologies, brokerages not only prepare themselves for the immediate changes but also set a foundation for future innovations in trade settlement and beyond.

The integration of advanced automated workflows ensures that brokerages are well-equipped to handle the demands of the T+1 settlement era, providing them with a strategic advantage in the competitive and fast-evolving financial market.

Conclusion

The integration of these technologies into brokerage operations not only drives cost efficiency but also significantly enhances service quality and client satisfaction. As the financial landscape evolves, the adoption of these technological advancements is not merely beneficial—it’s essential for staying competitive.

By keeping pace with technological progress, brokerages not only optimize their workflows but also position themselves as forward-thinking, client-focused entities in the finance sector.