Discover in our latest whitepaper the unique categories of exploits that can be used to attack ML systems and
how we can help you prevent these risks.
Click here to download the Whitepaper.
Click here to download the Whitepaper.
Voogt Pijl & Partners is a well-established consultancy firm with a strong presence in the Dutch advisory market focusing on the financial services industry. The firm uses consulting skills to help clients including banks, insurance companies and pension funds with overcoming their risk, regulatory and compliance challenges and provide business and digital transformation services. Voogt Pijl & Partners has expertise in KYC advisory and will assist our Benelux clients onboarding to Karbon – Delta Capita’s Client Lifecycle Management service platform.
This is one of a series of acquisitions Delta Capita has made since taking in $150m investment capital from Prytek in March earlier this year. Delta Capita is a fast-growing global managed services, consulting, solutions provider, and technology enabler dedicated to the financial services industry. The acquisition enables Delta Capita to further extend its customer reach in Benelux financial services and accelerate growth through the development of innovative propositions with leading-edge technology.
Following the acquisition, the senior management team of Voogt Pijl & Partners will hold a prominent role in the Benelux consulting practice. For its existing client base Voogt Pijl & Partners remains the primary point of contact and its clients can expect the same level of dedication, service and professionalism. Clients will benefit from Delta Capita’s technology capabilities, international presence and managed services in Structured Retail Products, Client Lifecycle Management, Pricing & Risk and Post-trade.
“Bringing the strong team of Voogt Pijl & Partners on board within the Delta Capita family will scale our consulting business and help our clients in reaching their goals. The transaction demonstrates our commitment to the Benelux region and provides clients with a strong value alternative to the big four” said Tom Kastelein (CEO of Delta Capita Benelux).
Commenting on the acquisition, Robert Voogt, Wouter Pijl en Maikel Miggelbrink, Managing Partners of Voogt Pijl & Partners, said: “We are excited to join the Delta Capita organisation and be able to benefit from existing competences, international position and technological capabilities. We will form the senior management of the consultancy practice in the Benelux knowing that our shared vision on the consulting profession is a key success-factor to optimise added value for our clients”
Delta Capita was recognised by the Financial Times as one of the top 1000 fastest growing companies of 2020. You can find out more about us by visiting our homepage here.
Machine Learning (ML) and more broadly Artificial Intelligence (AI) have quickly become everyday vocabulary for those of us that work in finance. AI and its subsets have the power to revolutionise how financial institutions work and have created opportunities to improve many aspects of the financial services value chain. It can make investment predictions smarter through NLP, improve financial monitoring, credit decisioning, help automate key business processes and even transform how talent is hired.
Less discussed, however, is the darker side, the inherent risks and vulnerabilities artificial intelligence can introduce into the system in the pursuit of speed, experience and cost reduction.
Automated facial recognition utilizing ML has been increasingly used by financial institutions in onboarding journey’s for banking customers, providing a smoother and quicker customer journey. However less is known about the use of adversarial machine learning which allows for imperceptible changes to a photo ID to fool an identification system. As the collaborative research team from Delta Capita, CTO of dragonfly and Raphael Clifford note in their recent paper ‘ML risks in financial services’ “an attacker can maliciously perturb their face image so that the AI system matches it to a target individual. Yet to the human observer, the adversarial face image appears as a legitimate face photo of the attacker”. How do banks protect themselves against something they can’t see?
Take this further to automated processing of documents. OCR is now the go to for the automatic processing of customer documentation. However again an adversarial attack can now cause even ID numbers of legitimate ID documents to be read by an AI based OCR system as a completely different number.
Regulatory bodies are quickly jumping on this issue, but the risk is a moving target with the attackers quickly moving onto the next weakness.
And that is just the deliberate attacks. Next you must consider the unsightly reality uncovered by many of the models which shows unquestionable bias and discrimination in machine learning. This is not a deliberate attack but is instead based on inherent issues with the data sets being used to train the models. The outcomes of which can be dire. There have been multiple stories in the news over the past two years whether in regards to US parole selection using AI to provide data driven recommendations to judges which perpetuated embedded biases, or Facebook posting ads for better paid jobs to white men. We also saw a more recent example in the UK with the ‘mutant algorithm’ as described my Boris Johnson, which disproportionately benefited students from private schools when they were unable to take their exams.
Earlier this year Algorithm Watch discovered that Google AI in the form of computer vision which automates image labelling was labelling temperature check devices as ‘guns’ when being held by dark skinned people but ‘electronic device’ when held by light skinned people. This was swiftly resolved by google but how many other biases lie in the underlying datasets which we are not aware of?
Machines alone do not have a capacity to be biased but artificial intelligence requires human intelligence or rather human data to learn from and this is where the problem arises. Artificial intelligence is becoming more embedded in our everyday lives but is there enough scrutiny on the outputs they produce? This is where explainability and transparency of the model will become increasingly critical and with regulation set to continue to increase in this space it is critical for organisations to act.
At Delta Capita we’ve created a solution to solve for this called DC Mint which essentially helps you gain trust in your AI model. It can help uncover underlying bias in your model, ensure regulatory compliance with regs such as GDPR and SR 11-7 4 and can help instil model confidence by understanding how the model behaves and works.
Machine learning has a huge capacity to streamline processes, improve human decisions and balance out the unconscious biases we all have. Human decisions are significantly more difficult to investigate and challenge, but a machines decision can be reviewed, and the algorithm or training data updated. Awareness and explainability is key: where did the data come from, has there been sufficient critique to the data sets on which the models have been trained. What are the outputs and can they be validated and deemed correct, legal and fair.
If we recognise the dark side, explore the potential attack avenues and understand the potential biases then we can address them. If we do this, machine learning offers a vast opportunity for good.
If you are interested to know more about how we can help you with your AI model then email us at email@example.com or click on the banner below.
While the insurance market remains robust and resilient during the covid volatility, increasing commercial pressures and market driven activity such as business interruption claims are putting pressure on margins. Regulatory obligations, Solvency 2 and stress testing oblige insurers to improve data, controls, reporting and business transparency. This is a familiar refrain for financial markets COOs and CIOs.
There remains a major task at hand for insurance sector C-suite as a legacy underinvestment in digital has been detrimental to insurance. New technology brings agile working, flexibility to deliver new product, improves STP and lower costs, while better client experience delivers higher retention and new business. The range of opportunities to benefit the business is wide and in conflict with budgetary limitations. The CIO and COO business case will be critical to prioritise digitisation in the sector.
The range of digitisation opportunities needs to be narrowed down to the most beneficial process changes and the optimally efficient automation initiatives. There is competition for budget and investment across underwriting, distributing risks and managing claims across wholesale and retail business. Key factors in the journey to automation and improved digital STP include opportunities for standardisation of data and process across bordereaux processes and end to end retail risk lifecycle.
There are major trends competing for investment budget including the following:
For the CIO and COO a response is to consider starting with customer centricity and the complete customer experience – where traditionally interaction with an insurer is an annual event, playing a role for the customer that increases perceived value could move client engagement to real time.
Many insurance processes are still manual and paper based, dependent on completing forms and .pdfs. Some steps to digitise the paper process have increased efficiency but there are continuing widespread incidents of errors and poor data quality which can only be improved when a full digital client journey is enabled.
Emerging digital client journey platforms and visualisation techniques are enabling better client service, a more personal experience and personalised products and pricing. In return facilitating a change in service models triggering a target operating model review driving resources and staff efficiency.
Call centre capacity has seen capacity challenges during the covid crisis as more clients have had to adapt to digital remote working. Improved efficiency and a better client experience is a double win for agile disruptors and provides a model for incumbents to emulate
Distribution channels such as Agents and Brokers are coming under pressure from emerging competitors, increasing standardisation of processes and a reduction in ability for personal interaction (esp during lockdown).
Insurers are increasingly looking to an ‘omni channel’ experience, the level of digitisation will vary according to complexity and value. As we have seen in banking and wealth management, enabling a high touch personal experience in a developing low touch digital world will bring competitive advantage including speed, convenience and personalisation for the client.
The changing demographics of the client base, also mirrored across the financial sector, is bringing increased appetite for digital interaction, wide ranging experience of the ‘customer journey’ in other sectors and an understanding and expectation of a quality digital interaction. Insurers are turning to emerging Fintech solutions to enable this approach.
Any new technology or process must integrate with the legacy platforms and business operating model – the focus is on value creation through digitisation enabling new customer centric high value products processed and administered at a lower cost.
CIOs and COOs at insurers need a clear strategy and roadmap to stay competitive in a digital world. The strategy must be dynamic and adapt to change over time as new trends and technologies evolve to meet changing market demand.
We recommend the following focus areas:
Incumbent IT departments are adapting to change, partners with expertise, especially those with adjacent financial sector experience can provide additional capacity such as TOM, assessment and review of solutions, resources to inform client perspective.
If you are interested to find out more about how we can help with your business transformation then email us at firstname.lastname@example.org. We are also hosting a webinar on 14th October where we will be discussing the above topic and more with a panel of senior executives. Click on the banner below for more information and to register your place.
Kick-Start your remediation and refresh projects as momentum may have slowed due to the impact of COVID-19 to ensure annual targets and compliance with regulatory requirements are met.
KYC remediation and refresh projects can be challenging in any year but as we all know, 2020 is not just “any year”. The global lockdowns that were put in place to deal with the pandemic have tested existing CLM target operating models in ways that were never foreseen or planned for. As well as managing remediation and refresh portfolios, some institutions have also experienced further strain on “bau bandwidth” for client onboarding as the market volatility experienced during COVID-19 has led them to have an increase in client on-boarding volumes not originally anticipated. With the 4th quarter soon upon us, additional priority will be focused on meeting year end targets and finalising delivery schedule plans for the coming year, 2021. Many CLM teams are also now facing an additional hurdle in having to urgently incorporate extra remediation portfolio volumes into their production schedules due to strategic changes implemented during the pandemic to ensure regulatory compliance is met. Strategic changes over the last several months include moving client portfolios to new operating jurisdictions or consolidating client portfolios into one operating jurisdiction, resulting in the need to update KYC profiles in line with local jurisdictions.
Based on feedback shared by clients during the beginning of the lockdown period, many CLM teams were successful in implementing short term processes and procedures to assist the KYC analysts in working remotely, with the KYC analysts demonstrating how agile and adaptable they can be. Maintaining the level of productivity has been challenging for some as the lockdown phases continued to be extended. The focus is now being directed to transitioning to the “New Norm”, which may be a slow and bumpy journey due to possible renewed COVID-19 outbreaks. As CLM teams take the opportunity to review their target operating models and transition to the “New Norm”, it remains equally important to maintain the priority and urgency in completing the remediation and refresh portfolios due for completion this year as regulatory timeframes and deadlines have not changed.
CLM teams should be focused on meeting their respective deadlines and avoid incurring a knock-on-effect of having their 2020 remediation and refresh portfolios moved out to 2021. The risk of incurring a knock-on effect can lead to a never-ending spiral of remediation projects, negatively impacting the future target operating models being formed as well as the ability to remain compliant with current AML regulations, which in itself may lead to costly fines. To minimise the risks, CLM teams can consider working with a partner who has the capability and capacity to seamlessly implement a remediation project that delivers quality data and can meet the set timelines ensuring the business remains compliant with both its own business standards and global AML regulations.
Learn how Delta Capita’s CLM services can assist in picking up the momentum to meet the set delivery schedules through delivering high quality data via bespoke remediation projects led by senior practitioners and KYC operating teams with domain expertise in KYC/AML
To find out more you can email us at email@example.com or by clicking on the banner below.
As debates on key CSDR Settlement Discipline issues remain unresolved and the expectations of the delay come closer to realisation, the industry understandably remains in a state of flux. However, regardless of precisely what happens with the timing of the regulation, it is now the time to get more disciplined about settlements, which is strengthened further by the latest ESMA Trends Risks and Vulnerabilities (TVR) report.
The study shows a dramatic surge in the level of settlement fails during the second half of March. According to the report, fails climbed to around 14% for equities and close to 6% for government and corporate bonds.
Although, one can argue that COVID-19 induced volatility and adaptations to work environments have driven, what the study states to be, the most significant rise in European trade settlement fails since 2014. The truth, however, is that these numbers put into sharp focus the longstanding operational and structural issues that have hung over trade settlement processes like a dark cloud for far too long now.
Identifying and remediating the root cause of any settlement delay or failure in time to avoid CSDR consequences wastes on average 4-6 hours of capacity. Market participants, therefore, need to shift their attention away from how to deal with trade fails, towards pre-emptively reducing the number of transactions that are failing to settle through internal efficiency improvement and collaborative approaches.
Achieving the above objective is by no means a straightforward task, as most financial institutions still operate with an inherited legacy technology architecture and highly complex operating models.
Firms should explore solutions that could address the issue of settlement fails that do not require wholesale changes to their existing architecture at unmanageable costs.
In the post CSDR era, every hour will matter when it comes to settlement efficiency, as the luxury of ‘another day’ to resolve a failing trade will not be possible. Increasing the control organisations have over their trade lifecycles and identifying settlement delay or potential failure warning signs on T+0 will give participants a considerable advantage. Detecting and being alerted to transaction event anomalies in real-time will provide impacted teams valuable time to prevent failures before CSDR consequences materialise.
Improving the discipline around internal settlement processes and encouraging counterparts to follow suit through collaboration, incentives or slaps on the wrist where relevant, is where we see the market trending.
Whether the European Commission confirms the delay of CSDR or not, it will be irrelevant as long as the industry conforms to find a solution to ensure penalties and buy-ins do not occur in the first place.
If you want to discover more about CSDR or want to know how we can help you with your CSDR transformation then click on the banner below or email us at firstname.lastname@example.org.
Technology and operating costs typically run into the millions of dollars every year and banks have traditionally deployed thousands of people across multiple locations to carry out Know Your Customer (KYC) tasks. Using advanced AI/machine learning tools, Delta Capita’s CLM platform, Karbon, speeds up the process of gathering information and decision making from days to minutes.
Karbon provides automated sourcing and aggregation of client information with ongoing monitoring (enabling perpetual KYC). This capability combined with its configurable workflow, rules, screening and reporting, ensures that AML prevention is significantly enhanced.
Commenting on the launch of Karbon, Gary McClure, former HSBC executive now Head of Delta Capita’s CLM business said: “Until now, a typical bank analyst has spent far too much time gathering information on the suitability of current and potential clients.”
“Our new Karbon platform structures data in a way that means analysts can focus their efforts on carrying out detailed due diligence on company data, adding real value to the analysis, instead of spending much of their time inputting data into a system.”
The CLM managed service and Karbon solution is part of Delta Capita’s strategic managed services strategic suite of offerings including Structured Products, Pricing & Risk and Post Trade Services.
Joe Channer, Chief Executive Officer at Delta Capita, commented: “Following Delta Capita’s success in bringing to market several recognised industry managed service solutions, I am delighted at the launch of Karbon, which reinforces our drive to provide innovative capital markets technology, enabling utility efficiencies and cost mutualisation.”
Delta Capita Group recently secured a $150m investment from Prytek Holdings, enabling the firm to further expand as one of Europe’s leading service providers and fintech hubs.
Andrey Yashunsky, Managing partner of Prytek Investment Holdings, added: “We are very pleased to be working with Delta Capita, creating innovative technology such as Karbon.”
Karbon is live and operational, supplementing Delta Capita’s existing Client Lifecycle Management (CLM) business. The managed services business involves Delta Capita’s expert practitioners carrying out KYC operations for banks on the Karbon platform, while the remediation service assigns the practitioners work on-site with the banks existing KYC team.
Interested parties can click here to visit the website, where they can watch a short intro video, and request a demo.
Imagine this, you are a COO of a major bank managing hundreds, sometimes thousands of people globally on Know Your Customer (KYC) and Anti-Money laundering (AML) tasks. Time that could otherwise be spent focusing on the better risk decisions is instead used to run an army of people gathering information on clients, all before inputting the information (often incorrectly) into multiple systems.
For those that work on this daily, it will no doubt sound familiar, but when one actually steps backs and looks at the bigger picture, all KYC is really about is harvesting and inputting data into a system before then deciding on whether or not to on-board or retain a customer. Sounds simple when put in these terms, so why do so many banks still have KYC processes in place that are costing millions in additional tech and operational expenditure per year?
The time is ripe for high-touch and low-touch environments to converge for the wealth management sector. On May 20, I had the pleasure of participating on the panel of Delta Capita’s High-Touch in a Low-Touch Environment webinar. Hosted by Delta Capita’s commercial officer, Julian Eyre, I was joined by industry experts Anand Rajan from UBS Wealth Management U.S., Hugh Adlington from Close Brothers Asset Management and Barclays’ James Penny. (Please click here to hear the full recording of the webinar).
Julian did a great job of chairing the panel. As I expected, the panelists shared similar views about convergence between high-touch, low-touch and the future of digital client services in the wealth management industry. We discussed strategies to reduce costs and increase revenues in a wider digital engagement context. We also pondered what tools are missing from our current portfolios to bridge the gap between low-touch and high-touch client engagement, and the roles of mobile, machine learning and AI. Furthermore, we talked about how the recent Covid-19 lockdown affected our client engagements and we introduced our digital client engagement services.
Following are some of my takeaways, with credit to my friends and colleagues’ insights.
The Delta Capita industry standard test pack, developed with a consortium of banks and agent lenders, is now available for asset managers, hedge funds and other buy-side firms for their SFTR testing. Clients of DTCC’s GTR service who license the test pack will have access to securities financing transactions life-cycle event test scenarios, including the expected results, to help identify issues and accelerate testing ahead of SFTR go live.
The pack comes with an online traceability module – linking SFTR test cases to the regulatory and industry technical standards, European Securities and Markets Authority (ESMA) rules and industry best practice. Firms can also benchmark their testing progress within their peer group.
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