Firms look to AI and automation to enhance corporate actions processing and increase STP rates

A survey conducted by WatersTechnology in partnership with SIX reveals growing interest in artificial intelligence by capital markets firms to improve workflow automation, data quality and exception management when it comes to processing corporate actions. However, challenges remain for market participants in the form of legacy infrastructure, fragmented systems and concerns around AI hallucinations.

Corporate actions processing remains one of the most operationally intensive functions across the industry, with firms facing ever-rising volumes, increasingly complex securities and growing regulatory expectations. This whitepaper, based on a nine-question survey of 50 capital markets professionals, reveals that, while respondents acknowledge the benefits of AI and increased straight-through processing (STP) rates, many continue to struggle because of partially modernized or fragmented infrastructure requiring frequent manual intervention and workarounds. Data inconsistencies, across multiple providers―a perennial challenge for large numbers of buy- and sell-side firms―emerged as the most vexing operational challenge, while siloed systems, interoperability issues and high exception rates also featured prominently.

Key takeaways:

• 54% of respondents were based in the Americas, while 44% were based in Europe, the Middle East and Africa
• 26% of respondents work at custodian banks/asset servicers, while 22% work at investment banks and 22% at traditional asset managers
• Only 16% of respondents described their corporate actions infrastructure as fully modernized with end-to-end automation, while 30% said their environments are mostly automated, but that they still rely on manual workarounds
• 26% of respondents already use AI for anomaly detection and reconciliation, while a further 22% are running proofs of concept for a range of functions
• 30% of respondents see improved STP rates and reduced exceptions as the greatest benefits of implementing AI for corporate actions processing
• 19 respondents identified AI hallucinations as the greatest risk associated with deploying AI to support corporate actions processing.

While firms clearly recognize the potential for AI to improve their workflow automation and exception management, they nonetheless remain cautious about its limitations. The findings suggest that AI is more likely to enhance existing corporate actions platforms than replace them, helping firms reduce their various manual touchpoints and improve their processing accuracy, while also allowing them to develop more scalable operating models.

Discover how firms are using AI and automation to modernize their corporate actions processing, while also improving their STP rates and reducing their operational complexity.