Bearing the fruits of our laboratory

SmartStream launched a new innovation lab in Vienna last summer populated with some of the industry’s finest talent. Just a year later, it is ready to roll out a transformative new artificial intelligence solution for reconciliation.
By Joe Parsons
Sponsored by SmartStream

In June 2018, SmartStream announced an ambitious innovation strategy. The move involved assembling some of the most sought-after talents in financial services and charging them with applying new technologies to existing processes, while operating separately from the rest of the company.

This innovation team comprised mathematicians, applied data scientists and statisticians, situated in Vienna in what would prove to be a major – and now quickly validated – investment in R&D. 

After just a year, SmartStream is ready to roll out a new reconciliations solution using artificial intelligence (AI), as one launch in a set of solution deployments stemming from the innovation lab.

“When I walk into those offices, the walls are plastered with formulas and things that remind me of my mathematical courses back at University,” says Haytham Kaddoura, CEO of SmartStream. 

“Our strategy was to bring in a new team and to isolate them to give them a greater ability to think independently.

“We said ‘let’s truly think outside of the box and solve modern issues within reconciliation’. Essentially what we did is get a team comprised of data scientists, mathematicians and statisticians, brought them together and they started really looking at things in a truly innovative way and then built the technologies around it.”

The team was focused on the deployment of AI, machine learning and blockchain technologies with financial institutions, in the areas of reconciliations, cash management and fees and expense management.

Alongside the reconciliations engine, SmartStream is also launching a mid-tier digital payments control solution and managed services with AI, as the results show how the technologies can significantly enhance existing services.

“I think what is going to differentiate this based on the feedback we’ve had from some of the clients that we are testing the technology with, is that it really is an industry changer,” Kaddoura explains.

“This is one of the first times in a decade that SmartStream steps back and develops something totally from scratch. We built this technology up purely cloud native with all the bells and whistles that could be needed from a modern angle, leveraging our expertise in the reconciliation space.

“We tested with one of our clients for 500 reconciliations in less than 30 seconds which is a massive improvement on anything in the industry today.”

Reconciliations has been highlighted by Global Custodian on numerous occasions as an area primed for AI/machine learning intervention where the technology can help to monitor, watch and learn.

It remains a crucial service for the industry and not one which will be eliminated through new technologies, rather a faster, more efficient and cost effective version of itself.

Kaddoura adds that through the use of the new advanced technology, its reconciliation software can also be rolled out throughout different sectors, and he sees a bright future for both AI-powered reconciliations and the technology’s broader applications.

“In all honesty, I think we’re just scratching the surface, we’re just users of what’s coming up out there. Look at some of the services that cloud-service providers are offering, they are global expansions, it’s phenomenal, its transforming our ability to serve clients and it’s really truly amazing what’s coming around the corner.”

The introduction of SmartStream’s first suite of AI products represents the first batch in what will be a series of solutions to emerge from its innovation lab in Vienna as the financial software provider looks to pioneer use-cases for the technology.

“It always makes me wonder what things are going to be like in the future,” adds Kaddoura.

“The world is changing very fast, it’s going to make everybody’s life easier, more accurate, and help regulators keep an eye on institutions, so from an end-user perspective it has tremendous advantages.