GDPR forces banks to rethink use of automation | Bond repackaging moving to standardize documentation | Unified order, execution, risk management a safer option
May 24, 2018
SIFMA SmartBrief Operations & Technology
News on the capital markets for operations and technology professionals
Top Story
GDPR forces banks to rethink use of automation
The EU's General Data Protection Regulation is requiring banks to revisit some technology decisions, especially around the use of automation and artificial intelligence. "Companies developing AI technologies will have to consider and embed the data protection issues into the design process," says David Martin, senior legal officer at consumer advocate BEUC.
Bloomberg Professional Services (5/22) 
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Rise to the CAT challenge.
Discover how you can turn Consolidated Audit Trail (CAT) requirements into a strategic advantage. Smart choices in technology, operations and processing flows can smooth implementation, enhance transparency and drive long-term business value. Learn how.
Operations Update
Bond repackaging moving to standardize documentation
Banks that have been split over how to standardize bond repackaging, pitting the shared special-purpose vehicle model against a separate special-purpose vehicle model, may be finding common ground. "Repack markets as a whole are seeing resurgence, which is good news, so there's room for co-existence," says Nomura's Jonathan Rogers.
Risk (subscription required) (5/23) 
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Unified order, execution, risk management a safer option
Integrating order and execution management and risk management across a unified platform can cut down on risk. "An integrated risk system aligns the market risk, compliance and trading functions in real-time, providing common oversight to all stakeholders," said Phil McCabe of Bloomberg.
Bloomberg Professional Services (5/21) 
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Treasury-management systems bring protections, efficiencies
Treasury-management systems can contribute to efficiencies, protections and the bottom line. Many firms are looking into upgrading these systems.
Treasury & Risk (5/14) 
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Innovation Happens in the Weeds
Technology isn't enough. You have to know how to apply it to the details. Broadridge provides the solutions and insights that help our clients answer one question: what's next. Are you ready? #ReadyforNext
Technology Update
AI, machine learning technologies transform banking
Banks are benefiting from advances in machine learning and artificial intelligence, with programs handling some customer-facing functions. Chatbots and virtual assistants are able to provide financial advice.
Payments Journal (5/23) 
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DLT proponents not concerned about rise of quantum computing
Developers of distributed ledger technology believe fears that quantum computing might one day grow powerful enough to threaten the security of DLT are premature. Digital Asset Holdings Chief Business Development Officer Chris Church said at SIFMA OPS that the encryption of DLT will be improved before quantum computing can be developed to the point where it poses any serious threat.
WatersTechnology (subscription required) (5/22) 
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Transparency an issue in AI risk models
Trading based on artificial intelligence is increasing, and banks are exploring use of machine learning for risk modeling. But AI and machine learning models sometimes lack transparency required by regulators, experts say.
Risk (subscription required) (5/23) 
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Regions differ on expectations of AI adoption
A Northern Trust survey of the Asia-Pacific region reveals widespread expectations that use of artificial intelligence will become standard practice throughout the financial industry within five years. This contrasts with attitudes in Europe, where a SimCorp survey finds only 15% of investment chiefs at buy-side firms consider AI deployment a priority for 2018.
Global Investor (subscription required) (5/21) 
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Regulatory and Legislative Update
Quarles: Fed to invite comments on banks' living wills
The Federal Reserve will ask for public comment on whether it should revise guidance for living wills for major US banks and foreign-based banks that do business in the US, Vice Chairman for Supervision Randal Quarles said. The move is part of an initiative to improve cooperation among US and foreign regulators in the event an international bank fails, he said.
MLex (subscription required) (5/24) 
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Basel Committee is watching fintech, Coen says
Regulators are monitoring developments in financial technology for signs of risk to stability or competition, says William Coen, secretary general of the Basel Committee on Banking Supervision. Coen says he sees no cause for concern, "but we will be watching."
MLex (subscription required) (5/24) 
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SIFMA Insights: RPA, Not Your Science Fiction Movie Robots
Robotics process automation (RPA) can be an improvement over more basic technologies but is not as advanced as artificial intelligence or machine learning. Indeed, RPA is making fintech solutions attainable for firms of all sizes and in a timely manner. Inside this note from SIFMA Insights, we analyze what RPA is and what it is not, and identify opportunities for RPA in financial services. With results from an anonymous survey of our members, this report was published as the industry gathered in Phoenix for SIFMA OPS 2018.
SIFMA (5/7) 
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Register for SIFMA's Fintech Conference: June 20-21 in NYC
Fintech continues to drive the transformation of the securities industry: Artificial intelligence and machine learning are giving firms new insights, blockchain projects are moving closer to production, and robotics are pushing the boundaries of industry operations. SIFMA's Fintech Conference will bring together innovators and industry leaders to discuss the emerging tech evolution and how existing regulatory frameworks can accommodate transformative technologies. Featuring keynote discussions with Craig Phillips from the US Treasury and Rob High, CTO for IBM Watson. Register today to join us at the SIFMA Conference Center in NYC.
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