SmartStream
SmartStream CEO, Haytham Kaddoura, talks to AST about the company’s progress with its new innovation centre as well as future initiatives in the pipeline
Can you tell me more about SmartStream’s entry into the AI market and what the company is offering?
We understand the transaction matching, exceptions and investigation needs of our customers, and these processes are prime for the adoption of artificial intelligence (AI) and machine learning technologies.
In 2018, we officially launched the SmartStream Innovation Lab. It is an isolated environment where a highly skilled team consisting of applied data and computer scientists are able to devote themselves solely to the investigation of how data is processed for financial institutions. The lab is bursting with energy and ideas; it’s where our innovations come to life.
What are the biggest challenges the industry is currently facing within technology?
There are many challenges, but we address them, it is our business. Financial institutions are learning to utilise data from associated systems and we have been gathering this data for more than 30 years. Banks have hundreds, if not thousands, of systems pumping in data and they have to find an efficient way to consume that data.
The challenge going forward is how to integrate systems and consolidate the data so that it makes sense and allows banks to understand its operations across different business units. Furthermore, clients can gain more visibility across their entire global operations. This is the key challenge institutions are facing right now.
The second challenge is getting access to skills. There is a shortage of people with the knowledge of how to truly leverage machine learning and AI technologies–people don’t have experience largely because it’s such a relatively new field. There is going to be an immediate need for people with the right skills to address the gaps in the market.
A new innovations team was recruited at SmartStream last year, how is the initiation of that team progressing?
It’s going very well. We are pushing a range of products out into the marketplace at Sibos to be followed by a steady stream of solutions and innovations.
How are AI and robotics technologies transforming the financial services industry?
It’s a massive transformation that is affecting how we service clients and how we understand the needs, dynamics and the accessing of client data in a far more efficient way.
New technology is improving operational efficiencies in terms of analysis and robotics while eradicating human error and mistakes in regulatory reporting. We’ve found we even go back to the regulators in advance of them finding any issues.
There’s a lot of negative talk in the media about how new technology will be replacing jobs. I don’t think this is the case, the overwhelming impact for the global workforce and business as a whole will be very positive. It’s about taking opportunities, embracing different concepts, and allowing people to develop new skills.
Ultimately, people are doing their jobs better which helps their company stay competitive.
Do you think some companies are using such technologies because they feel a certain pressure to?
It depends, I don’t think there is any pressure. Operationally, if firms want to remain competitive in the future I don’t think they have much choice. To remain relevant they need to embrace new technologies.This is very applicable to the retail and consumer world.
There are many people that are not happy with the concept of using AI for AI’s sake and frankly, I think they’re right. It’s about the advantages of using it, so it’s not necessarily jumping on the bandwagon, it is about what it is really going to do to help their business processes.
It is the engine, and that’s the way SmartStream approaches things. We have a reputation that people rely on and when we invest in the research and development of new solutions, it means something.
Some people have been just throwing terms around with different examples and different entries into the market because they are AI-enabled, absolutely, but it’s only because it means something that could be done in another way.
At SmartStream, it also means something, and it’s really going to enhance the experience in a way that nothing else could, so it’s not just for its own sake.
That’s a different way of looking at things, we have three different entries that do so—and that’s how we differentiate ourselves.
Has increased regulation in the last 10 years become a catalyst for the use of more technology in asset servicing?
The impact of regulation on financial services has been massive. In terms of accuracy and speed of data provided to regulators, it is now instantaneous and more frequent compared to 10 years ago. If you look back to the last financial crisis, batch and overnight processing were common, especially for institutions with global operations. They need to understand that in terms of liquidity they must effectively address and understand exposures effectively and at any point in time.
Liquidity shouldn’t be an operational burden, it can be a competitive advantage and we understand how the technology that makes that happen can add true business value. Institutions can now leverage cloud computing, AI and machine learning to achieve the goals that have long eluded them–real-time liquidity management on a global level.
I’ve had sessions with regulators where we’re waiting to access that data which in this day and age is unacceptable. Massive changes have happened and there are many more to come regarding the technology used in financial institutions. One that we are now just beginning to see is cashless entities and SmartStream is at the forefront.
How do you think technology will develop over the next five years? And what is SmartStream working towards in terms of technology?
The change is very fast-paced, especially now with AI, robotics and talk of many new technologies being introduced to the market, and SmartStream is keeping pace. However, as in the past, we don’t just jump in with any technology to say we are there and have a solution.
We investigate, meet with customers and industry experts to ensure we can develop something that will add real value and not just include the latest and greatest technology simply to say it’s in our solution. We want to make sure there’s a real need for it and it will make a difference.
An example would be in the asset servicing space. We have quite a few announcements coming up in the next few months about solutions we have been developing in the last year.
We will be debuting three of these at this year’s Sibos with more coming out in the following months. I can say these products will truly be groundbreaking. There is nothing like them in the market.
Our three entries were chosen because we want to demonstrate that SmartStream is at the forefront of technology, and they represent the integration of our technology in very different offerings tailored to very different customers.
We have chosen to debut it as part of our managed services offerings, as an integral part of some of our cloud-based solutions designed for mid-tier deployment and as the core to a truly revolutionary reconciliation solution which is absolutely brand new in every way.
I’m excited by the progress we’re making and, with future announcements on the horizon, the industry will really understand the breadth of what we do and the commitment we are making to our customers with new technologies and best practices.
The innovation centre is where the idea for future solutions germinate and begin to form and the innovation and spirit is something that has truly permeated the company and the way we do business.
