Systemic risk in the superannuation system likely doesn’t stem from funds themselves, but from their service provider relationships. Regulators need to be thinking harder about where and how it arises – something they’re not necessarily well set up to do.
Big asset owners and managers are embracing the private markets as one avenue for growth, but the complexity that brings to portfolios means they also need to get a better view of what might be decades of siloed information.
BNP Paribas rolls out ‘natural language generation’
BNP Paribas Securities Services, with US$10.6 trillion in assets under custody, has started to use ‘Natural Language Generation’ (NLG) to help its global custody clients enhance monitoring and oversight of their operations. The new reporting is being rolled out globally, starting in Europe and the UK.
As part of its digital transformation program, BNP Paribas is using NLG to transform large amounts of structured global custody data into concise commentaries. It is a software process which converts structured data into a human language, similar to the way ‘decompilers’ translate artificial computer languages.
Along with traditional monthly statistics reports providing in-depth data on their operations, BNP Paribas clients will receive analysis and commentaries on their assets under custody, settlement, corporate actions and income activities.
This one-page executive summary, written in natural language, will alert clients to unusual patterns and highlight areas for improvement and best practices, allowing for enhanced oversight, controls and operational efficiency. For example, the summary points to the percentage of corporate actions instructions received after deadline or to manual instructions rates and suggests specific actions to increase efficiency and thus mitigate risks and lower costs.
Christelle Ybanez, head of asset owners and asset managers, strategy and planning, at BNP Paribas Securities Services, said: “Leveraging artificial intelligence technology, our NLG report summarises hundreds of pages of data into easy-to-understand key trends and recommendations. This will provide our clients with insightful analysis on the wealth of data generated by their operations, helping them enhance oversight and efficiency across multiple markets.”
The solution will be deployed globally, starting with France, Germany, the Netherlands, Spain and the UK.
– G.B.
