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: End-to-End Lineage for Financial Services: The Missing Link for Both Compliance and AI Readiness

The importance of complete robust end-to-end data lineage in financial services and capital markets cannot be overstated. Without the ability to trace and verify data across its lifecycle, many critical workflows – from trade reconciliation to risk management – cannot be executed effectively. At the top of the list is regulatory compliance. Regulators demand a...

BLOG

A-Team Launches Inaugural AI in Data Management Summit New York City

Artificial intelligence-led applications offer financial institutions the potential to do more with their data at a time when increasingly complex economic and geopolitical influences place extraordinary operational pressures on them. The technology is now being applied to all parts of an organisation, from asset and risk management to customer relationship management and regulatory compliance. A...

EVENT

Data Management Summit London

Now in its 16th year, the Data Management Summit (DMS) in London brings together the European capital markets enterprise data management community, to explore how data strategy is evolving to drive business outcomes and speed to market in changing times.

GUIDE

Regulatory Data Handbook 2025 – Thirteenth Edition

Welcome to the thirteenth edition of A-Team Group’s Regulatory Data Handbook, a unique and practical guide to capital markets regulation, regulatory change, and the data and data management requirements of compliance across Europe, the UK, US and Asia-Pacific. This year’s edition lands at a moment of accelerating regulatory divergence and intensifying data focused supervision. Inside,...