About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Observational Learning Boosts Data Quality, Improves Reconciliations, Cuts Costs of Exceptions

Subscribe to our newsletter

Large data volumes and manual data validation techniques are making it difficult for firms to achieve levels of data quality required to support seamless transaction processing and regulatory reporting. The problem is exacerbated by MiFID II and other emerging regulations that impose new processes on transaction reporting, including reconciliation of transactions from the trade repository against front-office records.

A solution to the problems of poor data quality and hence poor reconciliations lies in observational learning, a form of AI that learns by mimicking human behaviour and could, according to early indications, greatly reduce reconciliation exceptions and provide significant cost savings.

By applying observational learning disciplines to regulatory reporting, analysts at SmartStream Technology’s Innovation Lab in Vienna have completed proofs of concepts (POCs) with two major banks that succeeded in accelerating the exceptions management process while rapidly and vastly improving data quality. The result was a sustained reduction in error rates and an accompanying drop in operational costs associated with reconciliations in trade and transaction reporting.

SmartStream’s approach, which is detailed in an A-Team Group white paper Deploying Observational Learning for Improved Transaction Data Quality, took the concept of observational learning and applied it to exceptions management algorithms as part of its Affinity AI offering. This allowed Affinity to observe human data verification processes, capture and ‘understand’ them, and ultimately make recommendations for future exceptions.

The results of the POCs, which included Affinity observational learning within SmartStream’s Air cloud native reconciliations platform, show cost savings of at least 20%, with one participant in a PoC recording savings of $20 million. Download the white paper to find out how your organisation could benefit from observational learning.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Strategies, tools and techniques to extract value from unstructured data

Unstructured data is voluminous, unwieldy and difficult to store and manage. For capital markets participants, it is also key to generating business insight, making better-informed decisions and delivering both internal and external value. Solving this dichotomy can be a challenge, but there are solutions designed to help financial institutions digest, manage and make best use...

BLOG

AI No Magic Wand for Augmented Data Quality: A-Team Group Webinar

Artificial intelligence (AI) is often seen as a magic wand for many data operations but when it comes to augmenting data quality processes, the technology’s potential comes with a few caveats. Trusted data is critical to the smooth running of financial institutions’ operations. AI has shown incredible capabilities to ensure that, especially in such tasks...

EVENT

AI in Capital Markets Summit London

The AI in Capital Markets Summit will explore current and emerging trends in AI, the potential of Generative AI and LLMs and how AI can be applied for efficiencies and business value across a number of use cases, in the front and back office of financial institutions. The agenda will explore the risks and challenges of adopting AI and the foundational technologies and data management capabilities that underpin successful deployment.

GUIDE

Regulatory Data Handbook 2024 – Twelfth Edition

Welcome to the twelfth edition of A-Team Group’s Regulatory Data Handbook, a unique and useful guide to capital markets regulation, regulatory change and the data and data management requirements of compliance. The handbook covers regulation in Europe, the UK, US and Asia-Pacific. This edition of the handbook includes a detailed review of acts, plans and...