SmartStream Tackling TCO with AAC
Our flagship cash solution is the most widely-used solution of its kind in the world, with users in more than 80 countries. The upgrade to AAC will happen for all existing customers, offering major benefits with no complex integration process. “Firstly, the technologies have addressed the total cost of ownership (TCO),” says Brandli. “We have deployed the newest web technology, so no specialist web service technology is needed, and there is no database. Usually, database licences account for 30% of TCO. The solution is on a streaming platform, so it operates in real-time and has API connectivity to pull in the data.
“AAC is also fully containerised and has self-healing and high-volume capability. It can be deployed in the public or private cloud, or on-premises, and it has an unsupervised AI-matching engine, as well as our user- trained AI, Affinity, which learns from what users manually do with the software.
“The implications are that there are fewer manual touchpoints and less effort to set up rules,” Brandli adds. “However, I think the biggest impact is that it ensures that a bank can have a sustainable operating model. The biggest issue with manual actions is that they are based on an acquired skill set, and from a C-level perspective that poses a risk if the people with those skills get sick, retire or leave.
“It takes time to reacquire those skills, but Affinity can retain a lot of that knowledge, which creates a sustainable operating model,” he adds. “The cash solution was built on best-practice matching, extensive exception management capability and enterprise-wide reconciliation, but AAC now adds a fourth element by making all of the data available.” Availability means that, as well as having high-
quality, verified and reconciled data from a vast array of data inputs, that data can easily be passed on to other systems for processing. Clients can use APIs not only for loading and saving data, but also for interacting with it at any point through the lifecycle of any given event.
“It becomes a fundamental addition to our value proposition,” notes Brandli. “It is interesting for C-level executives because all data is verified and brought into relation with other pieces of data, so they can view the status of an operation or an organisation’s executive and how any action affects other activities. A bigger set of data than ever is available, it can be trusted, and we put everything in context.”
Beyond reconciliation
Many people think of SmartStream as being predominantly a provider of reconciliation solutions, but Brandli is keen to reframe the company’s image.
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“I talk about control rather than reconciliation,” he says. “Our job is to understand the details and we have a unique approach. Everyone knows data is the new gold but, at some point, you have to get down to the level where you can use that gold, so it doesn’t just sit there. Data is a commodity, but you have to understand how it can help you.”
“People are just starting to pick up on the idea that reconciliation is about control, not just matching and verifying data,” Brandli adds. “It can help you see how transactions are succeeding or failing and how much they cost. In actual fact this should be the main tool of reference for any COO to understand how efficient his operation is. Instead of trying to figure out how the different reports from business owners and departments fit together, this layer of operational control will consolidate that information with the unique capability of providing context, by bringing these operations into relation with each other based on reconciled, verified data and the true state of the exceptions across their transaction base.” In his opinion, every value proposition a bank sells to its customers ultimately results in a transaction, therefore the actual product is the transaction, which should be measured in terms of quality, success, failure, resolution and cost. Much in the same way that any organisation does when it is producing a physical product. The only difference is that a transaction today is a digital product.
SmartStream is already looking to innovate further. A pre-packaged Payment Exceptions Management solution covering both SWIFT MT and ISO20022 payments including CBPR+, Target 2, SEPA and in the near future FedNow, FedWire and CHAPS is already being rolled out to complement AAC and SmartStream Air, and the company is hard at work enabling control processes that move banks towards real-time payments capability, as well as adding cross silo trade process control for securities, and treasury confirmations. AAC is all about making digital payments solutions configurable, sustainable and affordable, as well as speeding up trade processes. This will be vital in the future, as nearly every exchange and central bank sees that processes are too slow. Furthermore, the industry- wide rate of trade failures is still at around 4.7%, which is far too high. SmartStream aims to change that. “If you were to find a product on Amazon but, when you order it, it tells you that you will have to wait three or four days to find out when it will be delivered, then you would not use Amazon any more,” says Brandli. “That is how banks work – but it must change.” “We are only at the start of seeing what value the data can deliver,” adds Brandli, stressing that he and his team are only getting started. Given everything they’ve achieved so far, you surely have to take them at their word. ●
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