Deutsche Bank Announces New Early Warning Service for Securities Settlement Delays Powered by Elastic

Real-time insights on settlement risk strengthen client portfolio management and ensure clients can comply with Central Securities Depositories Regulation deadlines
9 October 2020
LONDON, U.K. - 9 October 2020 -

Deutsche Bank today announced that they will launch an enhanced securities settlement service that proactively identifies in-flight security transactions at risk of settlement delay, to debut in early 2021. The enhanced service, powered by the Elastic Stack and Elastic’s machine learning and anomaly detection features, will enable the bank's clients to avoid hefty financial penalties under the upcoming implementation of the new Central Securities Depositories Regulation (CSDR) in 2021.

In 2020, Deutsche Bank launched its current real-time settlement service in Euronext, Germany and the UK. The platform provides its operations staff with a real-time view of the issues that can delay a transaction settlement, a stark contrast to traditional platforms which only provide a retrospective view of what has caused settlement delays.

Using dashboards powered by Elasticsearch and Kafka, Deutsche Bank's teams actively monitor transactions and are provided actionable tasks when a transaction is flagged at risk of delay. The operations teams can also offer other internal teams and external clients high-performance application programming interfaces (APIs) to run their own settlement queries, using Elastic's search and analytics engine.

Early Warning System Flags Settlement Delays

Deutsche Bank now plans to enhance its settlement service with Elastic's machine learning (ML) technologies, enabling the platform to move from real-time to forward-looking. The ML-enhanced service will proactively detect the in-flight transactions that require actions and alert the bank's teams before the transactions encounter issues.

"Our aim is to deliver a real shift in how markets view exception processing and to bring pre-trade performance to our post-trade operations. We can now detect transactions in real-time that previously would not be flagged as at risk, and divert our attention from the transactions that ostensibly appear to be at risk, but upon historical analysis have always matched in time to settle," said Christopher Daniels, director, Data Products, Securities Services at Deutsche Bank.

The analytics model underpinning the enhanced service is powered by Elastic's anomaly detection feature, which considers seasonality, market variation and other changing dynamics to provide the bank's operational teams with dashboards and action queues that are driven by a large set of factors that would be too broad and complex for a human to process.

"We have developed several dashboards covering liquidity, settlement performance, and risk and control, but the most recent innovations have been in running machine-learning algorithms in production to provide outlier detection. We're using the platform to identify the most influential features that are more likely to cause a late or failed settlement, and to focus our data quality reviews on activity that does not synchronise with what we would typically expect from a particular cluster. It's a very exciting time in our data roadmap," said Daniels.

"Deutsche Bank's partnership with Elastic showcases the innovation that is achieved when deep domain expertise is paired with the Elastic Stack," said Dan Broom, area vice president, Northern Europe, Middle East and Africa at Elastic. "Our machine learning and anomaly detection technologies are helping to fuel Deutsche Bank's innovation and delivering a real game-change in settlement processing."

About Deutsche Bank

Deutsche Bank provides retail and private banking, corporate and transaction banking, lending, asset and wealth management products and services as well as focused investment banking to private individuals, small and medium-sized companies, corporations, governments and institutional investors. Deutsche Bank is the leading bank in Germany with strong European roots and a global network.