Symphony Blog

Managing Risk Panel: Automating Workflows on Symphony

Katherine Kilpatrick

At Symphony Innovate 2018, leaders from BNY Mellon, DTCC, BlackRock, Vorto, and Willis Towers Watson, discussed the risk of human error in today’s business world. The panelists focused on how their companies are using automation to reduce manual processes, streamline workflows and reduce the risk associated with human error. Read the full transcript.

Harry Patz: So glad you're here with us for what I think is the jewel of this afternoon's sessions. We're here for a panel on Managing Risk with an excellent star-studded cast of panelists from around the globe to really get into the details of risk from a number of different perspectives. I'd like to start from asking each panelist to introduce herself or himself, and a brief bio of what they've been working on and their focus. Let's start with Mary Jane.

Mary Jane Ajodah: Hi, my name is Mary Jane Ajodah, I'm with BNY Mellon, and I look at FinTech and emerging technology within operations. So, BNY Mellon is an investor in Symphony and we have about 9,000 users on the platform today. We'll talk a little bit about our projects as we go along.

H. Patz: Excellent. Thank you, Mary Jane. Marisol?

Marisol Collazo: Hi, I'm Marisol Collazo, I'm at DTCC responsible for business development and strategic partnerships. I'm here today from the perspective of solutions that we're looking to provide in the post-trade processing space and how we connect with Symphony.

H. Patz: Excellent, Ila?

Ila Eckhoff: Hi, my name is Ila Eckhoff, I'm a Managing Director in our Global Investment Operations team, and I lead an industry and counterparty management effort at BlackRock. We are also an investor in Symphony and we see it as a key collaboration tool for us.

H. Patz: Thank you, Ila. Andy, welcome.

Andrew Peck: My name's Andy Peck, I'm a co-founder of Vorto. We're a small, niche IT services consultancy business. Recent Symphony partner, we really just got into the space and I'm mostly about using automation to reduce risk in IT and business processes, so that's our main interface to Symphony is using that capability.

H. Patz: Thank, you Andy. Tom, last but not least, let's hear from you.

Tom Srail: Good afternoon, I'm Tom Srail with Willis Towers Watson. Willis Towers Watson is one of the world's largest insurance brokerage and human capital consulting firms. I work in our cyber risk division, where we advise clients on managing cyber risk and also place a whole lot of cyber insurance for our clients.

H. Patz: Excellent. Let's get into the good stuff. Alright, risk can be a very broad canvas to discuss. You can pick any number of business abroad headlines from the news to talk about risk from the people perspective. So my first question for the panelists is how have you re-considered risk related to the human side of business over the past few years? Let's start with Marisol.

M. Collazo: Yeah, so I mean, when I think about the human side, I really see... I'd have to roll back a little to discuss what are the key trends that we're seeing in the industry, right? From a DTCC perspective, we are a utility, we are owned by many in the industry in terms of our community, so when we look at the human side and operational interaction in the post-trade space, we know that some of the grander themes of what our clients are facing are fees and margins being compressed, looking for ways to reduce their cost in real, transformational ways.

So, a lot has been done around operational efficiency and outsourcing and things of that. Where's the real shift coming from where they really can reduce those costs and transform in a significant way? And look, the opportunities are there now, with the, you know, as we've seen from some of what Symphony has shown us earlier today, right? Who can't get excited about some of those bot capabilities and how you really can transform operational interaction. So, when DTCC looks at that, we look at what role we can play in terms of marrying those capabilities and how do we transform that human interaction, really in a more intelligent way that can enable the grander goal, which is really getting to settlement finality, right? I think ultimately what we hear from clients is “we want to get from trade execution to settlement finality as quickly as possible, and what capabilities are out there that can help us do that?”

So, from a post-trade perspective where we have been focused is on “what is that paradigm shift that's now happening in terms of operational processing?” How can DTCC as a utility start to bring capabilities forward? And one of the areas that we have been working through is providing a partnership with our Exception management platform, which is, if you think about the platform and the content, DTCC has a ton of data that we can organize and through a Symphony interaction, we can now enable our clients to communicate through chat. So, with the content, with the collaboration component, the goal of getting to addressing any exceptions before they become a settlement fail is the key goal here, and so we're quite excited about that.

We see this really shifting in terms of how people interact, to resolve exceptions and reducing the touch points, I mean, ultimately eliminating them if we can, but really reducing those touch points so you can get a faster decision on an exception, communicate all the way to the right people in the organization and get that down before settlement so that trade can settle. So, that's really how we start to think about that paradigm shift from an operational perspective.

H. Patz: Thank you Marisol, and then we will move on to Mary Jane for some additional perspective.

M. Jane Ajodah: Sure, so I'll give a little bit of overview of our approach to risk at BNY Mellon and then what we see changing in terms of human risk and what we see staying the same. So, for those of you aren't familiar, BNY Mellon is a custodian bank, investment services, investment management, wealth management company. Importantly in this conversation, we're also a global, systemically-important financial institution, so formal risk management, our processes, our controls, our governance are of paramount importance for us and we have, given our scale, the operations of financial markets as a whole.

Alongside risk management in those formal policies, we also place equal importance on risk culture, so regardless of technology, having that ossification, that institutionalization, that every employee in the bank is a risk owner, is personally accountable and understands the processes and is comfortable with the processes for escalation within their group, that holds equal weight with risk management in our view. So those tenants don't change over time, regardless of the technology. What we do see changing is the ways in which we monitor risk and the ways in which we manage risk and have visibility as to the risk we take.

So, when we think about Symphony in particular, one area that is of obvious importance in terms of human risk has been the improvement that it's been over email, so email is inherently, you know, there's phishing, spoofing, some limitations in that protocol that Symphony doesn't have today. So, when you think about, you know, at the end of the line, the person that you're intending to speak is actually to that person. Symphony has a stronger capability in allowing us to do that. So, there's been a number of ways in which using new technologies like Symphony has helped us reduce the human risk, I think audit ability is another component of that, and we'll talk a little bit also about one of our, one of the bots that we've created, we presented it at Innovate Asia this year and some of you may have heard about it this summer.

Her name is Selena, she's a Symphony trade bot that we've connected with Deutsche Bank for trades on the Hong Kong Stock Exchange, and we're looking to expand that and grow that in other markets as well, in which our clients can follow a trade, see it through to settlement, communicate with somebody and have visibility across that lifecycle. So where we started with bot-to-bot communication--just visibility of what we're doing, visibility to our clients--additionally we've explored areas of integrating further data sources to be able to be more proactive and be more predictive about getting involved before a fail becomes an issue. So definitely there are areas in which that transparency and the auditability that Symphony provides is crucially important for reducing human risk and giving us perspective on where those risks lie.

H. Patz: Thank you, Mary Jane. Now, we also heard this morning about all sorts of security and cyber risks; I hope you liked the demo of us hacking and sort of all the challenges that it presents for everyone. One of the reasons we'd love to hear from Tom is a bit about how is that focus on cyber risk changes, I mean, every day, there's another headline about another breach, another risk. What have you seen from customers, how they're adapting and trying to stay ahead of some of these fast-moving challenges?

T. Srail: Great question, and when you figure it out, let me know.

H. Patz: I'll take copious notes.

T. Srail: Yeah, so it's in the headlines every day. We get involved in a lot of cyber incidents, hacking, breaches, both before and after. After the fact, we add about 10 to 15 new breaches to our database every day, actual events that have happened that we can track and analyze. We have, and interestingly, talking about human error, element of that in the last question, our latest numbers show about two out of three cyber breaches in the last year involved human error, so someone in your organization or someone in a partner's organization, making a mistake, whether it be intentional, inadvertent error, but some sort of human interaction that went wrong which caused it.

We always think of the hackers and the extortionists and the breachers and the advanced persistent threats out there in the nation-states, and that's a big part of the risk to our information, but a huge part of the risk to our information is right inside, and applying new technology to improve that, to lower that risk and to automate what you can and take out those potential for human error is a good thing. Another thing that a lot of companies are looking toward is improving their cyber IQ, improving their internal culture, their cyber risk culture. Obviously, training goes a long way, and working with your employees, working with your HR, working with your information security team, so it's really a lot of different things come to it. Obviously, things like cyber insurance, contractual transfer, outsourcing and making sure those contracts are as rock-solid as they can get and as beneficial as you can get as well, is very important.

About a third of breaches, roughly a quarter to a third, involve a third party. Breaches of data and cyber events, you see it a lot of times, but oftentimes when an organization reports a breach, they don't necessarily name the vendor that's at fault or the vendors or customers who are involved, so that happens a lot too, so those contracts are a very important part of your overall management of the risk.

H. Patz: Excellent, thank you. You know, security and compliance are sort of cousins to each other. One of the questions that we have for the panelists is to tell us a bit about the compliance risk in conducting business outside their firewall, both with counterparties and with partners. Maybe we'll start with Ila for your thoughts on that.

I. Eckhoff: Yeah, you know, it's interesting, one of the benefits that I think that's really come out of all the regulation that's happened in the last couple of years is it's forced all the different participants in the market to really work together, right? So it's no longer buy-side, sell-side, vendor, custodian, administrator. We're all partners in servicing a client, right? So, BlackRock is a fiduciary, that's our role that we live by, so it's about providing better financial futures for our clients. The only way we can service that client properly is that we all work together to manage risk, right?

So, from an operations standpoint, we want people actually looking at risk, so what do I mean by that? That means all the manual touches that we do every day, in connection with transactions? We want to eliminate those, so our mission going into 2020 is we're on the road to zero. That means I don't want to touch any transaction unless there's something wrong with it. When we look at the fact that we confirm 98, 99% of our trades on trade date, real-time within minutes, seconds depending on which technology that we're using, that our traders are executing electronically, that we're confirming trades electronically, you know somebody said earlier about getting to finality of settlement. So we want everything to be message-driven, we're very focused using things like FIX, using things like Symphony, right?

So, Symphony is a mechanism that we've now employed globally around the firm. We use it both internally and externally with our counterparties, and as I think we've demonstrated a little bit earlier today, now it's about taking that into the workflow. So certainly, simple example, yesterday, we had an issue where five or six different people around the firm in different areas were working on something. I click a button, I create a direct chat. Those five or six people are now in a chat and now we solve something in 10 minutes rather than having to try to search through everybody's calendar, get a call and work through a process.

Just a couple of clicks, right? So now it's about putting it into the workflow and really changing the way we operate all the way through to settlement. You know, there's a lot of discussion around things like blockchain, if we can get to finality of settlement very quickly after execution? Sounds an awful lot like that, right? And that's not only the buy side and the dealer transacting, that's the custodian, that's the administrator, that's to the, you know, ultimately the books and records of that fund, real-time. And if we can get there, that's the mission, that's the road that we're on.

H. Patz: Great perspective. Marisol, anything else to add to that?

M. Collazo: Yeah, look... I think Ila's certainly is representing what I mentioned earlier in terms of what the key challenges are, and the road to settlement finality is key, right? I think removing as many manual touch points is absolutely right, it's what we hear consistently. From a DTCC perspective, we're transforming as we see the industry transforming, so the question is how do we present the value the utility going forward into that? I have very strong views that as we look at this. It's about the efficiency of how we bring the community of 6,000-plus clients that we have, the data that we have in US clearings as well as the other services that we have. How do we bring that data content to our client community so that they can integrate into their Symphony bots or their workflows?

So that's a key thing that we look at as to what DTCC can do to help to solve some of these challenges. Ultimately, I think that getting that resolution and connecting to the front office and taking out some of the decision-making, you know? So when I talk about shifts, it's not just the human interaction, it's also a change in how we think about that workflow. So looking at for example, settlement instructions, right? I see this interaction, bilateral interaction, and I question “why?” If there's an authoritative centralized data source, let's just remove it. Let's just remove that decision-making and start to use that centralized source, so we have an alert, which is capturing all these SSIs, which as clients are being maintained. How do we make that more efficient? How do we integrate that into the workflow, so it's not just about creating the technology, it's also about shifting how we think about the work assignment and how do we use that much more efficiently?

H. Patz: Excellent. I'll ask, I'll actually ask Tom to chime in a bit about, on that theme of compliance, risk, anything he's seen or his thoughts.

T. Srail: It is becoming--we mentioned contracts a minute ago--it is becoming very important as companies interact with each other and as they begin their relationship with each other, too, the due diligence that needs to go on, and so being able to evidence that, IT security folks, if there's any in the room, understand the frameworks that we're all using today and adhering to those standards and being able to prove that is an evidence that is needed. It's a very important part of enabling those business relationships.

H. Patz: Excellent. Let's bring Andy into the conversation. One of the questions we're get a lot is how are firms embracing automation and reducing risk? So I'd ask him how does Symphony help you in that in your business?

A. Peck: Sure, so my area of expertise is enterprise service management, which means the deployment of tools and processes to manage essentially IT and the applications within IT. One of the biggest elements of that is how both business users and IT users have the ability to interact with those processes, and unfortunately so much of it is driven by email, right, and so for us, what we've been doing with Symphony is enabling integrations between those systems and another big element of that is reducing the number of systems. We have a plethora of systems all over the place. To be able to reduce the number, bring stuff into common platforms, join it up into Symphony and provide an effective channel which... I was talking to a lady from UBS this morning and she said, “I am so overwhelmed with notifications from these applications, I can't see the wood for the trees. I need something that's nimbler, real-time, quick and easy to use.”

We all know the challenge of email, we got a filter, it goes into folders, we lose it, we forget it. Whereas a dynamic channel connected, and I think to your point, Ila, I can then immediately bring two to three other people into that, right? So, the opportunities that brings, the efficiencies of operation that that represents to me is tremendous and we're seeing that. We've just deployed one application, it's a trade reconciliation application for Global Investment Bank with back office out of India, and they're taking 200 people, and we've been live two months and they claim they can already quantify the FTE savings, but more importantly the efficiency of the operation and just the general risk reduction of being able to reach counterparties so quickly, so they now do all of their interaction with counterparties over a Symphony chat channel.

H. Patz: Ila, I saw you nodding a lot, can you chime in?

I. Eckhoff: Yeah, so you know, you know what's interesting is we're not only an asset manager, right, but we're also a technology provider. So the Aladdin platform is used not only by BlackRock, the asset manager but roughly another 75 firms globally around the market. So, we were an early adopter of Symphony, again, it replaced our chat first of all and it was used internally and now we've got the ability to go external, so we're very excited about it and as much as we can do in Aladdin, and say that Aladdin is everything you need to manage money, our ability to communicate and facilitate that client service, right, is our ability to also connect. So, for example, we use the market platform to confirm OTC trades and the pilot that we're working on with them is around not only resolving those exceptions, but then getting that exception information back, right and then updating our system.

Ultimately, we want to get to, again, no touch, right? So, we've achieved a lot of technology in no-touch, where things don't break. The next step is to really deal with all the exceptions that I think we can all agree is still really manual, right? Things like payments, we're doing a lot, we're working with the FIX community, right, to automate payment processing that now is basically email and spreadsheets that are being exchanged across the market, right? We introduced a trade-day flow for ETD that didn't exist about a year or so ago.

So, we're looking for every avenue and everywhere that we do manual touches today to connect to the rest of the market and the thing about Symphony is we see that as a terrific collaboration platform that's already a network, right, and that network continues to grow. And as it grows and everybody's touching it and coming up with ideas, with new bots and new things that we can do, it's limitless what we can do with it and minimize that operational risk, right? Because we're all about post-trade. It's great, everybody, it used to be that everybody was focused on trading, right and it was about execution. We do a 10-year swap, the execution takes 10 seconds, the post-trade process takes 10 years, right?

So, it's nice to see the market moving towards that post-trade environment, right, where when we have an exception today and you're using email, ten different teams will touch it. Well if we can create a chat room, it goes in once and everybody that needs to see it and deal with it gets it one time in one place, and we resolve that issue and move on. And if we... If it's something that's as simple as a quantity difference, a trade difference, a price difference or whatever, it can go to those traders directly, they can communicate back and forth and hopefully, ultimately it goes right back into the trading systems, updates those trades, and it goes where it needs to go. And again, no touch. That's the dream and that's the path that we're on.

A. Peck: So just to finish on that...

H. Patz: Please.

A. Peck: That's exactly what we've implemented for this Asian investment bank, exactly that. They can amend the trades within the channel and it goes back to our source system, and then it feeds downstream systems, so exactly that.

H. Patz: Excellent.

M. Collazo: And if I could just add...

H. Patz: Please.

M. Collazo: Sorry, but it's about the connectivity. I think you'll hear the common themes, you know in terms of the road to no-touch, no-path, to zero. It's a common theme. I think the challenge as an industry that we face is how we create that connective tissue, right? So, how does this come together? Where is that network value? Where is, where are all these pieces coming together? What I find interesting in terms of the Symphony relationship as well is that it is bringing that community together, so that is an important aspect as we're looking at how the innovation is coming forward is “how do we create that network?” What are we doing and certainly from my perspective as I look at what the industry is working through, it's how DTCC bring that community forward? What do we do to add value in that space, right? And there's obviously a lot of data that you trust us with, whether it's on the clearing side or, like I mentioned earlier, maintaining SSIs.

So, I think it's important that I hope to next year, you know, I'll put the goal out there, is be back here and do a demo because I do think it's important to demonstrate how as a community we start to come together and create that connective tissue to really solve the challenge because as we all, POCs are great and the demos are great, but how we really start to industrialize this, so I think we'd be remiss not to sort of think through that.

H. Patz: I agree. Mary Jane, was there anything else you'd like to add to that?

M. Jane Ajodah: No, I agree with a lot of the points made. I think you can't overemphasize enough the importance of having an open API framework. So being able to push our information through Symphony, but also to our clients in the way that they prefer to receive it, via API and also linking in with some of the third-parties that are on top of Symphony has been crucially important. And I think when Symphony was first introduced to operations, it's kind of viewed as, “Oh, maybe it's a front office thing,” but truly understanding the power that it has as a channel for applications can't be understated, so I would just highlight that.

H. Patz: Really, I'd also kind of add from some of the dialogue I've heard here today is ostensibly, you folks aren't Google or Microsoft or SalesForce, a tech company. But you've all kind of made comments that we really have to become a tech company. How do you think about that in your roles ostensibly in the financial community, but a bit more forward-looking as a tech company? Any thoughts? Ila? Anyone want to add?

I. Eckhoff: Look, we're doing a lot of things, whether it's with RPA and different ways of looking at things, right, because again, our technology platform not only used by us but a lot of other firms across the market. So, one of the benefits of that is there's 13,000 people at BlackRock, there's another, and we have call it, I don't know, six trillion something on the platform, there's another nine or ten trillion dollars in assets on the platform that other users, right?

So we have all these people touching the platform and making recommendations and constantly evolving the platform to make it better, so to the earlier points, right, it has to be open API. We have to be using standard messaging. Standardization is key, even if it's getting our chat messaging in Symphony in concrete ways that it can actually impact transactions, right? So when we talk about standardization, it has to happen on many levels, and I think one of the interesting things that's come out of the evolving market is that everybody, top to bottom, from the top of the house to the analyst that we hired last week, regardless of whether they're in operations or technology or product development or what have you, everybody has to think about innovating and making processes better.

We expect everybody within our organization to always be looking to make things better, to never accept the status quo. We are constantly pushing for new ideas, new thoughts and new ways of doing things, and Symphony is just another vehicle we intend to use to get there.

H. Patz: Thank you.

M. Jane Ajodah: One thing.

H. Patz: Please.

M. Jane Ajodah: I'd add to that is it's been notoriously difficult to get the industry, particularly our industry in post-trade to get to the table. We can't rapidly iterate the way a tech company can because the risk is too high for what we're doing. It's not Facebook and Instagram, it's trillions of dollars, and so Symphony is actually really important to allow us to come to the table in a way that has, that you know, we could take... not entire, use case by use case differs, but at least we have a technology framework that we've agreed we can interact on and try things out and iterate on things. So I think, you know, my take away a lot from today is that these bots aren't really parlor tricks any more, it's really impactful and allows us to work together in a way that's lightspeed faster than the way we were in the past.

H. Patz: Excellent. Andy, wondering if you have any thoughts on that, coming from the services angle?

A. Peck: There's so many challenges across multiple organizations. Standardization is a massive, massive issue. It's... I don't know whether it's solvable at this point.

H. Patz: That's fair.

A. Peck: But I think there needs to be a push towards, well, sort of Ila's point around some standardization of messaging structure would definitely be a step forward. That would help particularly with counterparty interaction across different companies, if we had the standard to work to, and maybe that's something that Symphony could lead as an industry standard for something to push, to push that concept out. I think that would help tremendously to push the problem away.

H. Patz: Excellent. You know, all the dialogue, the great dialogue from the panels today, talked a little about where you've come and how you've made the adjustments. Let's imagine we had a crystal ball, right in front of you, looking forward. As you think about the future of collaboration within the financial community, with the risks that are out there, what do you see happening in the next few years? I'd like ask each panelist, maybe we'll start with Tom. Give us a view, kind of how you see things unfolding and then to steal the word, I think from Ila, what's the dream? How our things get better?

T. Srail: That's a good question. So, as we all lean into becoming more like tech companies, right, we're all, all of our companies are on the road to being wholly-owned subsidiaries of Apple at this point, right? So that's the crystal ball in the future of course, but no, it is very interesting. I've spent a lot of time working with technology companies and as tech companies try to be seen more as financial companies, they all want to be banks, they all want to, you know, Apple wants to... all these different companies want to be that.

The exact opposite happens in the non-tech industries. I've got a construction client who's building autonomous robots to build bridges without human interaction and all of the tech companies are moving to Detroit to put up headquarters there so they can build the next car and very interesting, this convergence that's happening across industries. And it's, I don't know what the whole point of what I'm saying is, but I think it's very interesting.

T. Srail: You asked about the future crystal ball, so I'll just shut up and turn it over at this point.

H. Patz: Alright, Andy. Andy, you're up, I think you can improve on that, no I'm kidding. Your thoughts.

A. Peck: Sorry.

T. Srail: Follow that.

A. Peck: I don't think I could.

M. Collazo: You can't follow that.

H. Patz: You thought you were getting off easy, nope.

A. Peck: I think he said it all, I don't think I can follow that. Pass.

H. Patz: Okay, Ila? Your views on the future?

A. Peck: Tough question.

M. Collazo: The dream.

I. Eckhoff: I think a lot of what we do today that's manual, payments, derivative trading, a lot of the processing that we do today, my hope is that 12 to 24 months from now, all of that is automated so that we're really at the point where we're only touching transactions when something's broken. That puts us in a position to be service-oriented and focus on working with clients and solving problems. That's what we're here to do, right? To create a better financial future for our clients. The way we can do that is not by doing reconciliations and churning data every day, right? That's what the machines are for, that's what the technology is for, that's what the Symphony is for, right? We get to the point where we automate all of the manual processes, we're in a much better position to create better outcomes, better products and provide better service to our clients and that's where we expect to be.

H. Patz: Marisol. Your crystal ball?

M. Collazo: Alright, my crystal ball. So that I think, two things. One is we're going to see an environment where there's going to be a real shift in how you resolve exceptions, in fact the exception's going to be the exception to the rule. And so you're going to have a much more streamlined workflow, right, in terms of getting from trade execution through to settlement and having settlement finality, so then in terms of where the focus is going to be, it's really going to be around what's the data telling you? Where are you getting your insights, and I was sharing with Ila earlier that it's a quote that it's not my own, but I think it's wonderful.

The current challenge is drowning in data but starving for insight, so I would say, future crystal ball is that we start tackling that and there are going to be, that's where the focus is going to be and those that really adapt now in terms of, question around being a technology provider, I think it's important that companies that are going to excel here do see themselves as technology providers, regardless of what space they're in and start to look at how they're transforming within their organizations and how they're going to have that edge on the five to ten year horizon.

H. Patz: Excellent. Mary Jane?

M. Jane Ajodah: I think you're going to see a lot less differentiation between quote front office, back officer, so I think that transparency through the trade lifecycle and particularly paying attention to that post-trade space over the next five, I think five, ten years would be my horizon, maybe not 12 to 24 months, but hopefully, I mean, maybe we get there. But I think definitely keeping an eye on that space and improvement of the process there is important.

I think for our industry as a whole, we'll see faster, safer collaboration through tools like Symphony and, you know it's kind of interesting, in my role I interact with retail banks from time and again, some of you may be from a more retail-focused side, and a lot of those conversations, they'll say, “Oh, we set up a challenger bank on an entirely new infrastructure, so we're not tied to what we had before, we're starting something brand new, going mobile,” and we don't... in our space and in an institutional space, we really don't have that luxury, so certain ways in which we can collaborate and bring information perhaps to a new structure, a new way of sharing, can perhaps be somewhat analogous to that.

H. Patz: Excellent, well I'm embarrassed to admit you've exhausted me, but I'm going to ask my help from the colleagues in the audience if they have some questions for our team of experts here, if you could just state your name and what firm you're from, raise your hand, we'll find a microphone between Andrew, I'm sure they'd be happy to provide some insight on some of your questions. Do we have any?

M. Collazo: We've wowed them.

H. Patz: We've wowed you. You have no questions on anything? Yes sir?

Audience Member: Ziad Iskandar from BNP Paribas. A question for you, Marisol, you mentioned about all the data that you have and I was wondering, what is your strategy to deliver on Symphony to your stakeholders a lot of that data?

M. Collazo: Yeah, so specifically what we're doing is we are collecting exception data, whether it's from our clearinghouse DTC or from our clients providing it to such as custodians and broker-dealers. What we're going to enable through the Symphony partnership is the ability to essentially push that exception and the content of that exception into Symphony and allow a collaboration to resolve that exception from two different firms, so it could be the buy-side client discussing with their custodian on what we call the platform that we have is DXM, on that DXM exception, getting a fast resolution so it really integrates into the client's workflow in their Symphony instance. Getting the resolution and then bringing that back down, so really a two-way communication to get the power of the Symphony collaboration combined with the exception data.

H. Patz: Excellent. Other questions? Yes sir?

Audience Member: Mary Jane, just curious. BoNI is in a unique position being an investment manager, being a servicing bank, a broker-dealer, all the different components as a provider, you have it all under one umbrella. I'm very interested in, from a custody or front-accounting point of view to your clients, how do you see Symphony interacting then to bridge some of the processes today that we know together, are very disparate or they're high-touch, they're inefficient and then they're ripe with risk. Where do you see the low-hanging fruit to bring Symphony to bridge us together?

M. Jane Ajodah: Sure, so where we started is really from, and in our perspective overall, I think Symphony is one channel through which we communicate with clients, but ultimately our goal is to communicate, you know, reach clients wherever they are, right? So Symphony may be one channel that clients prefer but ultimately we have to, we have to be able to push information to clients in a way that they can use and make them more efficient as well. Within the projects that we've done so far and what we have live, we focused primarily on trade status through Symphony, so being able to follow a trade through to settlement, the questions that we get in custody, you know, what's the status of my trade? What's a particular piece of information?

Symphony has helped, and particularly Symphony bots to query and alert and set signals, that's where we found a lot of efficiency for both ourselves and our clients, so that's been a starting point and just that exposure of information through Symphony as a channel. I think as time goes on, and I've seen a lot of the vendors outside here also looking at, you know, doing analytics and kind of having that sole focus on particular areas of risk, particular areas of pricing, be very interesting to see how that progresses over time, so I think in part it's going to be a mix of our information augmented with some of the capabilities of the third-parties that are focused particularly on certain areas of analytics.

H. Patz: Excellent. Other questions? Right over there, sir, you're next.

Audience Member: Hi, I'm, my name is Joe Riggio, I'm at CLS Bank, and my question is for Marisol. Specifically about your rolling out the new solution for exception management and using Symphony, and my question is really about participation. How many of the participants as a company are already on Symphony or within those company's divisions within the company are not on Symphony and how has that been to get those participants on the network?

M. Collazo: So, very similar to Mary Jane, what we're doing is from an exception manager perspective, we're live with that service right now and we do have clients on. We offer multiple communication modes, right? What we're really looking to do is make sure that clients, very same, I'll just exactly repeat what Mary Jane had said, in terms of if they're more comfortable on email, or any other alternative communication method, we support that.

What I like in terms of community though is that we're attracting a new set of users. Same firms, but a new set of users and so as firms are innovating around how are they solving for their workflow and operations and we can tap into that without having all this integration, you know separate development lift, right? We're just really tapping into their existing framework, so to me, that's very attractive, right, because it's simplifying the client adoption need, right without creating yet a separate initiative. So we offer multiple flavors of how you can communicate and collaborate over an exception, but we quite like the Symphony relationship in terms of bringing us to a different set of users and really demonstrating that there is a way which you can really start to eliminate that operational friction, right in that vertical flow.

H. Patz: I think there was another question over here. Yes sir.

Audience Member: Thank you, hi Don Hogle from Ricciardi Group. In the general AI, ML space, there's a lot of talk about the potential for a dark side that has a lot of risk to it, and certainly I think, maybe 24 months ago we wouldn't have thought that we would see the huge dark side to Facebook that we're now seeing every other week practically. Is there a dark side potential that your organizations are concerned about in this space, and if so, what is that and what's being done to think about that?

H. Patz: Anyone want to take a crack?

M. Jane Ajodah: I'd say in our approaches to ML, not specific to... I mean, kind of across the board in different ML implementations, our approach has generally been assist and recommend, so at the end of the day, personal accountability is the most important thing. I do see machine learning and AI, where we've had value from it is doing up-front research, making a recommendation to an operations employee, you know, a lot of that grunt work, a lot of the kind of slugging through reams of data to come to a conclusion, that can be done by machine learning, but the ultimate decision should be, has to be reviewed by somebody in operations, somebody who has that accountability to be able to explain why a certain decision was made.

So, I think in terms of Symphony, in terms of some of the applications there, I think I've seen with a lot of the bots it's kind of... the relationship is kind of query and get back information, but I think it's a very fair point and a very good point to say if you're going to use NLP or try and determine the intent of a client that's interacting with you through Symphony that there's, that that isn't totally put on auto-drive.

H. Patz: Any other feedback from, or a response from the other panelists?

M. Collazo: I'm certainly no security expert in this space, but what I would say is from a DTCC perspective, right, we take safeguarding our environment very seriously. My business perspective, my business lens on this is that we need to learn as we go through these steps, and so in that shift, in that paradigm shift that will happen over time, obviously it's going to be looking at where do you start to see those improvements, and how do you start to measure that before you go into a full AI, machine learning capability, so learn and adopt as you go and very often, the technology providers at DTCC looks at, you start with solving a business problem.

I think one of the challenges that we're facing a bit is getting very excited about technologies but not quite understanding what the business problem is. So if you take an approach where you're solving for a business problem using the technology and you start to look at your results and see where you're reducing that risk, where can you take that next step, now where you can get to in terms of artificial intelligence and the data informing you and having that human interaction, right? There's a balance, right, in terms of how far you go until you're pouring around the dark side, the potential dark side risk and what are learning and where are you getting the benefits of addressing the business problem? So I do think there's an importance there in terms of balancing, and I realize it may not be as sexy, but it's an important thing for us to keep in mind.

H. Patz: Yeah, Tom?

T. Srail: As an IT security guy, I am concerned about that. Don't do what I do: I go on Netflix and stream Terminator and I, Robot and that's how I do my research, but now Netflix is onto me, it won't put that in my feed any more, so I think, “ah, never mind.”

But yeah, no it is definitely something that a lot of futurists are looking at, a lot of researchers are looking at, trying to figure out how far that goes. I'm curious, I think, I don't have a good answer or good crystal ball on that, but very interesting.

H. Patz: I think we have time for one or two more questions. Anyone? Yes sir.

Audience Member: Hi, my name's Nelson, I'm from SocGen. I just had a quick question for anyone in the panel. With AI and sort of Symphony get a launch, let's say that you develop a bot. How does your firm go ensure the bot is giving the response that is adequate? If it's up to your standards? Because if it's continually learning, continually adjusting to the client, how do you ensure from a compliance perspective that it's doing what you want it to do or giving the responses that you want it to respond?

I. Eckhoff: I mean, internally we have an RPA that's building bots to do some different tasks, right, and there's a whole process it has to go through and just like any other development that we do that impacts the Aladdin platform, right? So we have the same controls around bots that we would for anything else that we're going to release that's going to ultimately impact the platform.

H. Patz: Yes?

M. Jane Ajodah: Yeah, I see RPA slightly differently than a Symphony bot. I think a lot of Symphony bots today, at least the ones we put into production and are using live are kind of dumb, right? So you say, you know, you're asking for something and it, you just say, “Show me open. Show me closed.” That's what we're comfortable with at this point in time. I think internally, there's certain chat bots where you can write more free-form but it's not for critical, mission critical information, so I'd say it's again, as to the other gentleman's point, I think it's going to be a while, if at all that we want to do that, something to be, you know... cautious, very cautious about.

H. Patz: Any more questions? Yes sir. Through the bucket brigade here.

Audience Member: Hi, my name's Dave Jilotti, I'm from AllianceBernstein. So, one of the big things with all of these Symphony bots is that they can talk to external parties, right? Counter parties. But the problem is all of these counter parties have very different compliance departments with very different rules, so it's a... you know, it's a never-ending question of how do we stop compliance from ruining business?

M. Collazo: I am not answering that question.

Audience Member: But now it's become how do we stop other company's compliance departments from ruining business? So I just, I guess the question at hand is do you feel that compliance departments can't keep up with Symphony bots and the new security that Symphony has in order to properly, I guess, properly guess at the risk associated with such external bots?

M. Jane Ajodah: So the way we've approached it, we have a general technology, global technology policy. However, business, there's business risk, operational risk, there's a number of risk dimensions, so even if we define our own global technology policy for when we use Symphony externally, et cetera. Business case by business case needs to be currently evaluated, so I kind of see it in the same way you might think about case law or something like that is as business use cases come up and we can put them past compliance and say, “Look, this is something live in production we want to do today. What are the risks, why can't I put this certain piece of information through Symphony?”

You will, we'll have a better sense of guidelines, but it's actually kind of been, my experience with dealing with risk and compliance with some of these things, it's been kind of... they need something to react to, so, you know we just have to keep proposing different ideas and see where those limits are. I think it comes back to the general principles of our overall risk profile, but on this new platform, there needs to be some, you know need to be some use cases to bounce back.

H. Patz: With that, I think we're pretty much out of time. I'd like to thank Mary Jane, Marisol, Ila, Andy, and Tom for an excellent and engaging panel. Thank you so much, folks.

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