BNP Paribas Securities Services seeks help from AI to enhance trade processing services

Maria Nikolova

Smart Chaser will analyze historical data to detect patterns in trades to proactively warn clients and their brokers on their live trading activity so they can act accordingly.

Artificial intelligence solutions keep conquering new areas in the financial services industry, with BNP Paribas Securities Services offering another piece of evidence that this trend is gathering pace. On Monday, October 9, 2017, the company announced that it will count on Smart Chaser, a trade matching tool harnessing artificial intelligence and predictive analysis, to further automate the trade processing services it provides to investment managers.

A significant chunk of trades processed on behalf of asset managers require manual intervention in order to complete. This presents a challenge which is often caused by counterparties holding mismatching data for the same trade. Harnessing the powers of predictive analysis, Smart Chaser will analyse historical data to identify patterns in trades that have required manual intervention in the past and proactively warn clients and their brokers on their live trading activity so they can act accordingly.

Trade matching – the comparison of trade details between the client and its broker – is an important part of the middle office service provided by BNP Paribas to its investment manager clients.

Using machine learning and predictive analysis, Smart Chaser will predict the likelihood that a trade will not “match” automatically and will therefore require manual intervention. With Smart Chaser, BNP Paribas seeks to predict the likelihood of a delayed “trade matching”, ascertain the contributors to the delay and suggest a pre-designed email template to be sent by the middle office operational team to relevant clients.

AI is most often used by banks to help with tasks involving tedious work with heavy loads of data. In September, for instance, J.Score, a joint venture of SoftBank Group Corp (TYO:9984) and Mizuho Bank, said it will use an AI solution to offer loans tailored to the specific needs and life style of each consumer. The decision on consumer loans will be based on an AI score. In fact, an AI technology will be responsible for the calculation and analysis of the score.

Last month, Sumitomo Mitsui Financial Group, Inc. (TYO:8316) and SAS Institute Japan Ltd. announced a partnership that will see AI being used in the AML compliance department of Sumitomo Mitsui Banking Corporation. AI will be used to detect and report suspicious transactions with regard to anti-money laundering regulations.

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