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Generative AI in securities services
Journal of Securities Operations & Custody,
16
(4),
302-315
(2024)
Abstract
Generative AI (GenAI) is a technology that, since the launch of ChatGPT in November 2022, has taken the world by storm. While a lot of the conversation around GenAI is hype, there are some real applications of this technology that can bring real value to businesses. There are, however, risks in applying this technology blindly that sometimes can outweigh the value it brings. This paper discusses the potential applicability of GenAI to the processes in post-trade and what impact it could have on financial institutions and their ability to meet challenges in the market, such as T+1. We also discuss the risks of implementing this technology and how these can be mitigated, as well as ensuring that all the objectives are met not only from a business perspective, but also technology and compliance.
Keywords: GenAI; LLM in securities services; LLM model learning; risk of GenAI; NLP processing in post-trade; when to use GenAI
The full article is available to subscribers to the journal.
Author's Biography
Søren F. Mortensen is Global Director Financial Markets, IBM Consulting Global Centre of Competence and an IBM Industry Academy Member. He has more than 30 years’ financial markets experience in delivering mission-critical transformational projects for financial institutions. This includes complex transformations of financial institutions, innovation in financial markets leveraging new technologies such as artificial intelligence (AI), quantum and blockchain and post-trade initiatives around intelligent operations, reference data management, collateral management and over-the-counter (OTC) derivatives processing. In addition, Søren has been involved with many post-trade utility and consortium initiatives. Prior to rejoining IBM in 2013, Søren was Managing Director for SunGard Global Services in Europe, developing and delivering service solutions around SunGard products and working with several Tier 1 European clients. Having previously worked at financial organisations such as Morgan Stanley, Paribas Capital Market and HBOS Treasury, he brings a practitioner’s view to the challenges faced by customers today. For four years Søren was an adviser to the Consultative Working Group of the European Securities and Markets Authority’s (ESMA) Financial Innovation Standing Committee (FISC) advising European regulators on technology and innovation.
