Transform Securities Lending with Machine Learning

C3 AI® Securities Lending Optimization applies advanced AI-machine learning techniques to help banks automate and optimize securities lending operations. Securities lending groups have historically relied on rules-based software to automatically approve borrower inquiries. Unfortunately, due to the high uncertainty inherent in securities lending, existing processes routinely reject thousands of executable borrower requests. C3 AI Securities Lending Optimization closes this gap.

Banks face significant uncertainty when deciding whether to facilitate a client’s request to borrow securities. The bank must quickly assess both how much they expect the borrower to trade and whether sufficient securities are available. Unfortunately, neither quantity is knowable. The quantity that the client will actually execute is not known until the end of the day and lender stock availability is not updated in real-time. Additionally, in most markets, the settlement date for trades is two days after the trade is executed, at which point, the availability of the security may have changed. C3 AI Securities Lending Optimization uses machine learning to quantify client and lender uncertainties then automatically approves all executable client inquiries, drastically increasing the number of transactions the banks are able to facilitate.

To do this, C3 AI Securities Lending Optimization centralizes data from many disparate source systems such as inquiries, settlements, lender availability, borrows, market data, third-party lending data, corporate actions, and earnings. C3.ai then combines and manipulates this data in hundreds of out-of-the-box permutations that provide predictive signals to the machine learning models. Finally, C3 AI Securities Lending uses the outputs from the machine learning models to automatically determine optimal lending decisions.