Shift to faster settlement times aided by AI tool in fixing faulty trades.

Banks and broker-dealers in the financial industry are preparing for the transition to shorter settlement times by adopting a new artificial-intelligence tool. This tool aims to rectify and prevent any trade errors that may occur during the settlement process.

Broadridge Financial Solutions Inc. deploys OpsGPT, a chatbot that uses generative artificial intelligence and extensive language modeling technology to analyze and solve operational problems, such as failed trades, and provides insight into the cause of the problem and suggestions to resolve it. and prevent it from happening again. The product was developed to help companies cope with increased stress and costs when the market moves to the so-called to the T 1 requirement later this year, which will speed up securities trading settlement times to one day out of two.

“The need for operational efficiency in areas such as real-time error resolution is increasing in the T1 world,” Vijay Mayadas, head of capital markets at Broadridge, said in an interview. The new tool helps with that transition by allowing users to “understand and anticipate the deeper reasons why a deal failed,” he said.

The world’s biggest financial firms have been experimenting more with artificial intelligence, spurred by the promise that it will help boost employee productivity and cut costs.

The new tool, which is in trial with a few Broadridge customers, can also be used in multiple languages, including Japanese, leveraging the power of large language models, Mayadas said. New York-based Broadridge will integrate the technology into an existing post-trade system that clears and settles about $10 trillion in trades a day.

OpsGPT can identify a trade and figure out how to link positions across asset classes and geographies using Broadridge data. It then recommends solutions for failed trades to avoid repeating the same mistake.

“Some banks can have billions of unpaid, failed trades every day,” Mayadas said. “If you can reduce that number by even 10 to 15 percent, you can save millions of dollars.”

The new offering complements the previous Broadridge AI application, which serves the fixed income market. Launched in 2023, BondGPT offers a chat function that uses data to answer bond-related questions and help investors identify corporate bonds that fit their investment criteria. OpsGPT is expected to launch in two to three months, according to Mayadas.

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