Leading Point Financial Markets recently partnered with selected tech companies to present innovative solutions to a panel of SMEs and an audience of FS senior execs and practitioners across 5 use-cases Leading Point is helping financial institutions with. The panel undertook a detailed discussion on the solutions’ feasibility within these use-cases, and their potential for firms, followed by a lively debate between Panellists and Attendees.

EXECUTIVE SUMMARY

“There is an opportunity to connect multiple innovation solutions to solve different, but related, business problems”

  • 80% of data is relatively untapped in organisations. The more familiar the datasets, the better data can be used
  • On average, an estimated £84 million (expected to be a gross underestimation) is wasted each year from increasing risk and delivery from policies and regulations
  • Staying innovative, while staying true to privacy data is a fine line. Solutions exist in the marketplace to help
  • Is there effective alignment between business and IT? Panellists insisted there is a significantly big gap, but using business architecture can be a successful bridge between the business and IT, by driving the right kinds of change
  • There is a huge opportunity to blend these solutions to provide even more business benefits

CLIENT DATA LIFECYCLE (TAMR)

  • Tamr uses machine learning to combine, consolidate and classify disparate data sources with potential to improve customer segmentation analytics
  • To achieve the objective of a 360-degree view of the customer requires merging external datasets with internal in a appropriate and efficient manner, for example integrating ‘Politically Exposed Persons’ lists or sanctions ‘blacklists’
  • Knowing what ‘good’ looks like is a key challenge. This requires defining your comfort level, in terms of precision and probability based approaches, versus the amount of resource required to achieve those levels
  • Another challenge is convincing Compliance that machines are more accurate than individuals
  • To convince the regulators, it is important to demonstrate that you are taking a ‘joined up’ approach across customers, transactions, etc. and the rationale behind that approach

LEGAL DOCS TO DATA (iManage)

  • iManage locates, categorises & creates value from all your contractual content
  • Firms hold a vast amount of legal information in unstructured formats – Classifying 30,000,000 litigation documents manually would take 27 years
  • However, analysing this unstructured data and converting it to structured digital data allows firms to conduct analysis and repapering exercises with much more efficiency
  • It is possible to a) codify regulations & obligations b) compare them as they change and c) link them to company policies & contracts – this enables complete traceability
  • For example, you can use AI to identify parties, dates, clauses & conclusions held within ISDA contract forms, reports, loan application contracts, accounts and opinion pieces

DATA GOVERNANCE (Io-Tahoe)

  • Io-Tahoe LLC is a provider of ‘smart’ data discovery solutions that go beyond traditional metadata and leverages machine learning and AI to look at implied critical and often unknown relationships within the data itself
  • Io-Tahoe interrogates any structured/semi-structured data (both schema and underlying data) and identifies and classifies related data elements to determine their business criticality
  • Pockets of previously-hidden sensitive data can be uncovered enabling better compliance to data protection regulations, such as GDPR
  • Any and all data analysis is performed on copies of the data held wherever the information security teams of the client firms deems it safe
  • Once data elements are understood, they can be defined & managed and used to drive data governance management processes

FINANCIAL CRIME (Ayasdi)

  • Ayasdi augments the AML process with intelligent segmentation, typologies and alert triage. Their topological data analysis capabilities provide a formalised and repeatable way of applying hundreds of combinations of different machine learning algorithms to a data set to find out the relationships within that data
  • For example, Ayasdi was used reason-based elements in predictive models to track, analyse and predict complaint patterns. over the next day, month and year.
  • As a result, the transaction and customer data provided by a call centre was used effectively to reduce future complaints and generate business value
  • Using Ayasdi, a major FS firm was able to achieve more than a 25% reduction in false positives and achieved savings of tens of millions of dollars – but there is still a lot more that can be done

DATA MONETISATION (Privitar)

  • Privitar’s software solution allows the safe use of sensitive information enabling organisations to extract maximum data utility and economic benefit
  • The sharp increase in data volume and usage in FS today has brought two competing dynamics: Data protection regulation aimed at protecting people from the misuse of their data and the absorption of data into tools/technologies such as machine learning
  • However, as more data is made available, the harder it is to protect the privacy of the individual through data linkage
  • Privitar’s tools are capable of removing a large amount of risk from this tricky area, and allow people to exchange data much more freely by anonymisation
  • Privitar allows for open data for innovation and collaboration, whilst also acting in the best interest of customers’ privacy

SURVEY RESULTS

  • Encouragingly, over 97% of participants who responded confirmed the five use cases presented were relevant to their respective organisations
  • Nearly 50% of all participants who responded stated they would consider using the tech solutions presented
  • 70% of responders believe their firms would be likely to adopt one of the solutions
  • Only 10% of participants who responded believed the solutions were not relevant to their respective firms
  • Approximately 30% of responders thought they would face difficulties in taking on a new solution

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