Automating the Trade Confirmation Process with Intelligent Document Processing

January 26, 2021 / Intelligent Process Automation, Investment Banking, Use Case

automate the trade confirmation process


Financial firms involved in any kind of trading know that the confirmation process can get complex and time-consuming, which is why many of them are now looking at intelligent document processing as a way to streamline the process. 

Any kind of trade – including over-the-counter stocks, stocks traded on an exchange, and derivatives – requires a settlement process and, ultimately, a trade confirmation. It’s an important step because the confirmation spells out the terms under which the trade was executed, so both sides can see whether the trade matched their expectations in terms of price, quantity and timing. 

Finding errors in trade processing

Many securities trades are done over the phone, making mistakes a distinct possibility. Others are executed by computers at high speed, in which case even a small mistake may compound into a large one. Post-trade processing is intended to identify and rectify any errors, as the buyer and seller exchange various documents spelling out the terms of the trade. The financial institution then has to examine these documents to ensure accuracy and, ultimately, issue a confirmation. But getting to that stage often requires lots of manual intervention to review the documents. A “six eyes” process is not uncommon, where three individuals each review the documents. 

Clearly, this is time-consuming for banks and other financial institutions, which is why they are looking to automate the confirmation process. But given all the different parties involved in numerous trades, there’s a high degree of variation in the documents to be processed. That means technologies such as robotic process automation or approaches that use templates and optical character recognition (OCR) won’t get you too far. They work well only with documents that are the same from one to the next and highly structured. 


Related Article: Process Automation Comes to ISDA Master Agreements


Intelligent automation in confirmation processing

What’s required is an intelligent document processing tool that can handle unstructured content and has the ability to “read” documents much like a human would, to find and extract the pertinent data.  The Indico Intelligent Process Automation platform, for example, makes it a simple matter for financial institutions to create models that can automate trade confirmation processes. 

One Indico client, used it to streamline its interest rate cap confirmation process, which involves PDFs and other unstructured content. The company uses the natural language processing capabilities built into the Indico platform to “read” the documents, identify key terms and enter them into an Excel spreadsheet. From there, the data is fed to another application that automatically sends an email to a subject matter expert to review the confirmation for accuracy. 

Big savings in time and money

In all, the automated confirmation process saves 15 min. of processing time for each document, resulting in a 75% cost savings and 400% increase in process capacity – meaning it takes far fewer people to do the same job. (Read more about it in this previous post.) That’s the kind of benefit intelligent document processing can bring to bear on the trade confirmation process – and many others – for financial services institutions.  

To see for yourself how intelligent automation can be applied to financial applications like confirmation processing, arrange a free demo. Or, if you have any questions, feel free contact us


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