“We're developing future-proof platforms that integrate directly in Scotiabank’s trading and operational infrastructure. Managing risk in trade and having a reliable reporting infrastructure are just two of the ways Scotiabank is fostering trusted relationships globally. The way we’re modernizing regulatory reporting is a powerful example of innovation in action,” says Yeung. “Onboarding, pre-trade and transaction reporting are notoriously complex activities involving multiple systems and various supervisory regimes. The engine will run on rules - using machine learning and artificial intelligence - so that decisions can be made automatically when criteria are met. Now Scotiabank is building a decision engine that will make the process more efficient, transparent and error-free.
It’s a complex landscape in which Bank employees manually evaluated each trade for compliance with local financial laws. Scotiabank manages the needs of regulators in each country it operates in. That’s not the only innovation happening in the trading space. This cloud-native platform is powered by graphics processing units, the sort that are powerful enough to help generate blockbuster computer-animated movies. The XVA risk platform uses advanced mathematical modelling and artificial intelligence to provide insights into risk. “And that’s proven indispensable during market volatility because our traders can run multiple-scenario analyses on the fly to inform their hedging strategy.” “Our XVA platform provides traders and risk managers with better insights across asset classes,” says Stella Yeung, SVP, Global Head of Engineering, Global Banking and Markets, Data & Analytics at Scotiabank. In fact, in 2021, this innovative technology caught the eye of the industry, winning Scotiabank the award for Innovation in Technology. It performs 915 million calculations per second - faster and more accurately than ever before. So, Scotiabank built a high-performance XVA risk engine to calculate valuations and risk levels. XVAs are one of the largest computational challenges banks face. XVAs aren’t new to financial services, but what Scotiabank is doing with them is. They do this with the help of valuation adjustments - or XVAs - to assess the true cost of potential trades and the level of risk involved. What happens behind the scenes in financial markets? A team of risk managers and traders protect customers and the Bank’s assets - equities, bonds, etc.
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