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Fortia Financial Solutions and BNP Paribas Securities Services cooperate to build the depositary bank of the future

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Investment funds – used by millions of savers worldwide – usually rely on the services of a depositary bank. The mission of a fund’s depositary such as BNP Paribas Securities Services is to safeguard the fund’s assets and ensure that the fund is managed in compliance with its prospectus and relevant regulations. BNP Paribas Securities Services is the leading depositary services provider in Europe. Thanks to a new cooperation with Fortia Financial Solutions, BNP Paribas Securities Services is defining the future of depositary banking services.

A new approach…

Today, more than 57,000 investment funds are available in Europe. It is critical that these funds are managed in line with all applicable regulations, and that investors can be sure that the fund they chose is being managed as it was described to them. Essentially, this is the role of the depositary bank. Maintaining strong, independent oversight of funds and their managers is becoming more and more complex in an increasingly regulated environment, hence the necessity to find new and more efficient ways to achieve this goal. BNP Paribas Securities Services is leading the way in embracing new technology to re-invent working methods in this otherwise very conservative industry.

In 2016, under the leadership of Mustapha Ouafik, Global Chief Operating Officer, Depositary & Fiduciary Services, BNP Paribas Securities Services reached a major milestone in its quest to integrate new technologies into the solutions proposed to its clients. It worked hand in hand with Fortia Financial Solutions, to create a prototype, demonstrating that technologies such as artificial intelligence, machine learning and natural language processing - smartly applied - could make a real difference.

 

Finding the right partner…

Fortia Financial Solutions was identified with the help of BNP Paribas Securities Services’ Innovation & Digital Lab and L’Atelier BNP Paribas’ prospective and innovation consultancy.

Convinced by the solution and the team, BNP Paribas Securities Services selected Fortia Financial Solutions from 25 companies that had been identified as potential partners. Indeed, Fortia demonstrated truly impressive skills in areas like artificial intelligence, machine learning and text mining, combined with a real understanding of BNP Paribas Securities Services’  funds compliance challenge. Having been founded by former fund managers and R&D engineers, expert in the design of new compliance management, internal control and reporting solutions, Fortia was the ideal partner. The team invested all its industry and technological knowledge into four years of research and development that resulted in a system called INNOVA, designed specifically to support fund compliance using new technology.

To co-develop the prototype BNP Paribas Securities Services employed an agile approach and worked in ‘garage mode’ at neutral premises in Levallois. Fifteen developers and data scientists, functional experts from IT and engineering, industry practitioners, advisers from l’Atelier as well as consultants in the audit of artificial intelligence algorithms, worked together. Fortia and BNP Paribas Securities Services combined their respective talents and worked as one team for four months in the Spring of 2016, using real data from 80 of the most complex funds already served by BNP Paribas Securities Services. The prototyping approach was developed through three main phases: solution assessment, feature review, requirements and prioritisation. These were followed by agile development and testing to build a minimum viable product (MVP).

A win-win partnership…

The cooperation is benefiting both partners, as any good partnership should. BNP Paribas Securities Services was able to test how the different bricks in artificial intelligence, machine learning and text mining could help achieve its business objectives.

Fortia had the opportunity to see how its algorithms could meet the business requirements of a leading European depositary bank and potentially implement its solutions on a wider scale within the industry. Following the MVP phase, Fortia Financial Solutions and BNP Paribas Securities Services have  embarked into a new phase of partnership which will see the bank adopt Fortia’s leading technology to digitise its depositary processes, and help Fortia be successful at marketing best-in-class fund compliance solutions.

BNP Paribas Securities Services, a wholly owned subsidiary of the BNP Paribas Group, is a leading global custodian and securities services provider. Backed by the strength of the BNP Paribas Group, we provide multi-asset post-trade and asset servicing solutions for buy and sell-side market participants, corporates and issuers. With a presence in 36 countries and a global reach covering 90+ markets, our network is one of the most extensive in the industry, enabling clients to maximise their investment opportunities worldwide.

The OpenUp Platform connects BNP Paribas employees, working on innovation or business projects, to startups around the world. These can be Fintechs as well as startups in other adjacent services and technologies. The OpenUp App allows startups to apply for projects within the bank, connect to BNP Paribas' experts and post ideas, explaining how their solution can support the bank’s ambitions.

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