BNP Paribas is a Smart Chaser for AI-powered trade
BNP Paribas Securities Services is implementing Smart Chaser, a trade matching tool using artificial intelligence (AI) and predictive analysis, to further automate trade processing services it provides to investment managers.
According to BNP Paribas Securities Services, trade matching – the comparison of trade details between the client and its broker – must be performed in a timely manner or there is a risk a trade may require manual intervention or, in some cases, fail. It reckons that “intervention or failure is particularly likely if a trade is not settled on the day of execution”.
Smart Chaser will predict the likelihood that a trade will not “match” automatically and will therefore require manual intervention. With the tool, BNP Paribas Securities Services says it aims to be able 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.
Thomas Durif, global head of middle office products at BNP Paribas Securities Services, says: “We estimate that up to 30% of the trades processed on behalf of asset managers require manual intervention in order to complete. This is an industry-wide challenge which is often caused by counterparties holding mismatching data for the same trade.”
He explains that 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 take action promptly”.
In terms of the latter action, Durif says BNP Paribas Securities Services has reached around 98% prediction accuracy.