By Rob Frost, Global Head of Business Solutions
Over the last 26 years, Pirum has evolved to become a key part of the infrastructure on which securities finance runs. That connectivity – along with the standardized data model underpinning it – has become the basics, the table stakes, the foundation everyone now builds on. The real value today lies in what that foundation makes possible: AI intelligence operating across the complete trade lifecycle, driving an unprecedented level of automation and creating a better securities financing industry for all firms involved.
AI-assisted development is allowing firms to stand up prototypes of almost anything. But every AI build relies not only on the intelligence of those developing it, but the data, or intelligence layer, that feeds it. Securities finance is a different beast to many AI use cases, and requires expertise and thoughtful guardrails, given the financial, regulatory and reputational risks involved with getting it wrong.
Building a data lake and putting an LLM over the top works for simple use cases, such as looking at benchmark rate trends over time, but for a sophisticated lifecycle which needs to collate data from dozens of internal systems, external market infrastructure providers, and of course your trading counterparts and their multiple systems, a much more sophisticated data layer is required.
This part is crucial to the success of any securities finance AI model, and it doesn’t just require an initial build investment, but ongoing maintenance and quality control. Imagine feeding incorrect or incomplete data to a trader and expecting them to execute the most profitable trade? An AI model is no different.
So, you’ve invested in the intelligence layer and built an AI model that comes up with smart solutions presented to the human-in-the-loop – what now? Do we expect a human to then manually update a trade or book a collateral movement? Of course not. Although AI creates a ‘new world’, the connectivity into thousands of end points within the ecosystem is the infrastructure you need to achieve the ultimate efficiency that complements what AI can bring to securities finance.
Surely, however, AI enables this connectivity to be built faster? True, but this industry contains sensitive trading and client data and sits on systems that are essential to the daily functioning of the wider capital markets. This requires robust data protection and segregation, strict cyber security protocols, and the experience and knowhow from firms that have been trusted with this for decades.
By 2030, we want a full intelligence layer across the Complete Connected Lifecycle. Firms that want unparallelled automation get AI-powered workflows. Those building their own AI infrastructure get real-time APIs and MCP access, with additional intelligence that Pirum provides. And firms that prefer to hand it off entirely can have Pirum run the whole process end to end. All of which are of course operating within robust guardrails, human-in-the-loop controls, and continuously tested in real time but also overseen by seasoned securities finance experts.
Back to buy versus build. The most important variable is where your engineering time creates the most value. Your internal data, your strategy, your algos, that's your edge, and no one else can build it for you. But data format changes, system upgrades, regulatory shifts, market structure updates: that's not proprietary, it's maintenance overhead that looks the same for every firm. Pirum has got that covered and is here to build with you.
McKinsey's recent research has a striking data point: 44% of enterprises are now scaling AI across their organisation, yet EBIT attribution from AI has stayed flat at 37% for two years running. Adoption is accelerating faster than the returns are showing up.
The firms actually seeing the true benefits are those that rebuilt their processes around AI rather than bolting it onto old ones. Close to three-quarters of high performers rebuilt workflows from the ground up. Only a quarter of everyone else did.
That's the model behind Pirum's AI offering: a new operating model for post trade, built around AI from the start, running on our intelligence layer and established connectivity data, with the guardrails and expert human-in-the-loop controls that keep clients ahead of the market rather than exposed to it.
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