Deutsche Bank rolls out early warning service for securities settlement delays

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Deutsche Bank today announced that it will be launching an enhanced securities settlement services, powered by the Elastic Stack, for identifying in-flight security transactions at risk of settlement delay, to debut in early 2021.

Elastic’s machine learning and anomaly detection features are expected to enable the bank’s clients to avoid hefty financial penalties under the upcoming implementation of the new Central Securities Depositories Regulation (CSDR) in 2021.

“Our aim is to deliver a real shift in how markets view exception processing and to bring pre-trade performance to our post-trade operations. We can now detect transactions in real-time that previously would not be flagged as at risk, and divert our attention from the transactions that ostensibly appear to be at risk, but upon historical analysis have always matched in time to settle,” said Christopher Daniels, director, Data Products, Securities Services at Deutsche Bank.

The Bank stated that it uses dashboards powered by Elasticsearch and Kafka for monitoring transactions and are provided actionable tasks when a transaction is flagged at risk of delay. Deutsche Bank also plans to boost its settlement service with Elastic’s machine learning technologies, thus enabling it to proactively detect the in-flight transactions that require actions and alert the bank’s teams before the transactions encounter issues.

“We have developed several dashboards covering liquidity, settlement performance, and risk and control, but the most recent innovations have been in running machine-learning algorithms in production to provide outlier detection. We’re using the platform to identify the most influential features that are more likely to cause a late or failed settlement and to focus our data quality reviews on activity that does not synchronise with what we would typically expect from a particular cluster. It’s a very exciting time in our data roadmap,” said Daniels.

“Deutsche Bank’s partnership with Elastic showcases the innovation that is achieved when deep domain expertise is paired with the Elastic Stack,” said Dan Broom, area vice president, Northern Europe, Middle East and Africa at Elastic. “Our machine learning and anomaly detection technologies are helping to fuel Deutsche Bank’s innovation and delivering a real game-change in settlement processing.”