Clearstream automates collateral management with OSCAR
- OSCAR supports definition of intelligent eligibility criteria for collateral baskets
- First collateral management tool in the market uniquely combining several AI techniques including knowledge representation and reasoning, machine learning and (structured) natural language processing
- Reduced time to market from weeks to hours
- Development together with fintech Intelli-Select
Clearstream takes the next step in automating collateral management by launching OSCAR (Own Selection Criteria with Automated Reasoning), the first collateral management tool in the market uniquely combining several artificial intelligence (AI) techniques including knowledge representation and reasoning (KRR), machine learning (ML) and (structured) natural language processing (NLP). As of Q4/2022, OSCAR will allow participants to easily define, create, negotiate and exchange optimised eligibility profiles of collateral baskets.
Until now, creating and managing collateral baskets has been complex and time-consuming and thus has put a major operational burden on market participants. They have had to manually review, compare, and translate different profiles of multiple triparty agents while keeping up with changing business requirements, market conditions and regulatory requirements, such as Uncleared Margin Requirements (UMR).
Clearstream seeks to tackle these issues with OSCAR, supporting users in defining their own intelligent eligibility criteria whilst simultaneously checking automatically for inconsistencies. The tool also ensures interoperability with different counterparts, improving collaboration, negotiation and reconciliation. This increases flexibility, scalability and speed while maximising operational efficiency.
OSCAR was developed with the technical expertise of fintech Intelli-Select and their academic partner, the KU Leuven.
Samuel Riley, Head of Investor Services & Financing, said: “OSCAR reduces the time to set up and negotiate an individual fit-for-purpose collateral basket from weeks to hours. Like this, Clearstream provides an enormous relief for client operations who can create individual, yet machine-readable collateral baskets to maximise the value of their business’s collateral. With Intelli-Select, we found an excellent partner to build our collateral management vision for the industry thus supporting our clients in the best way possible.”
Bart Coppens, Co-Founder & CEO of Intelli-Select, added: “Our solution is built on latest research in AI techniques enabling the creation of sophisticated insights with full explainability of the reasoning process yet based on intuitive natural language inputs. The partnership with Clearstream gives us the opportunity to put these advanced techniques to work, solving real-world issues. We are delighted to be partnering with Clearstream in bringing this innovative initiative to the securities services industry.”
As an international central securities depository (ICSD), headquartered in Luxembourg, Clearstream, which is part of Deutsche Börse Group, provides the post-trade infrastructure for the Eurobond market and services for securities from 59 domestic markets worldwide. With 16 trillion Euros in assets under custody, Clearstream is one of the world’s largest settlement and custody firms for domestic and international securities.
As a Brussels-based fintech, Intelli-Select developed its innovative solution in collaboration with the university of KULeuven. It has the power to automate the creation of logically correct insights across different knowledge and data domains. Complex problems are often solved with complex software solutions requiring precision in interaction & elaborate programming to get results. Intelli-Select, on the other hand, can extract business complexity out of your financial services processes and have it managed in an easy & intuitive way by business experts rather than IT.