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 trading know 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 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 essential step because the confirmation spells out the terms under which the trade is executed, so both sides see whether the trade matched their expectations in terms of price, quantity, and timing. 

Finding errors in trade processing

Many securities trades are made over the phone, making mistakes a distinct possibility. Computers execute others at high speed, in which case even a tiny mistake may compound into a large one. Post-trade processing identifies and rectifies any errors, as the buyer and seller exchange various documents spelling out the terms of the trade. The financial institution examines these documents to ensure accuracy and, ultimately, issue a confirmation. But getting to that stage requires lots of manual intervention to review the documents. A “six eyes” process is not uncommon, where three individuals each review the documents. 

This is time-consuming task for banks and other financial institutions, which is why they are looking to automate the confirmation process. 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. 

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Intelligent automation for confirmation processing

What’s required is an intelligent document processing tool that can handle unstructured content and can “read” documents much like a human would to find and extract 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 customer used it to streamline its interest rate cap confirmation process, which includes PDFs and other unstructured content. This customer uses the natural language processing (NLP) capabilities built into the Indico platform to “read” the documents, identify key terms and enter them into an Excel spreadsheet. The data feeds into another application that automatically sends an email to a subject matter expert to review the confirmation for accuracy.

Considerable 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 case study.That’s the kind of benefit intelligent document processing brings to bear on the trade confirmation process – and many others – for financial services institutions.  

To see for yourself how intelligent document processing can be applied to financial applications like trade confirmations, schedule your free demo. Or, if you have any questions, feel free contact us


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