Collateral IT: Leveraging Google Cloud for Enhanced Asset Allocation at HSBC - Build What's Next
Case Study

Collateral IT: Leveraging Google Cloud for Enhanced Asset Allocation at HSBC

2597

Of your peers have already read this article.

2:30 Minutes

The most insightful time you'll spend today!

HSBC is utilizing Google Cloud and AI/ML to optimize its asset allocation strategies, resulting in improved efficiency and performance. Discover how this collaboration is revolutionizing asset management at the bank.

Have you ever heard of an optimization problem? Imagine you have a million marbles, all of different sizes, colors, patterns, and weights. You need to fill up 1,000 jars of different sizes with them, but each jar has restrictions as to which colors, patterns, and how many marbles of each type it can hold. After filling all the jars, you may keep any leftover marbles, so you want to ensure that these are the shiniest ones in the bunch. How do you go about solving this puzzle? There are many possibilities, but what would be the most efficient way to guarantee you’ll reach the best possible outcome every time? 

At HSBC, our Collateral Treasury desk and Collateral Management team have been solving a similar problem, but instead of marbles and jars, we work with around 50,000 assets that can be used as collateral, and 1,000s of collateral accounts.

Our Collateral Treasury Trading desk helps finance our Markets business by providing the required collateral, such as certain debt or equities, to cover its obligations to a client. The collateral could be used by HSBC for its margin requirements, CCPs (Central Counterparty Clearing Houses), or for securities financing transactions. Each obligation can have different eligibility criteria about what assets can be used as collateral for each client. These rules and restrictions revolve around the type of asset allowed or daily liquidity factors.

The process of matching collateral to obligations is known as an allocation, and it can get complicated the more diverse the collateral pool and the more customers you have. It is important to allocate collateral in the most efficient way and, traditionally, this business problem has been managed manually or by a third party against a set of simple rules.

But by collaborating with Google Cloud, we can improve collateral allocation through automation. Even small efficiency gains have the potential to make a significant difference when the amount of collateral inventory managed is tens of billions of dollars. It means the Collateral Treasury desk is much more efficient when managing its own funding costs or regulatory ratios such as the Liquidity Coverage Ratio (a key financial resource measure for banks that ensures sufficient high quality assets are readily available to survive periods of liquidity stress).

Leveraging AI to tackle a complex business problem

Our solution is OPTIC, a HSBC platform utilizing Google Operation Research Tools, or OR-Tools, an open-source optimization library provided by Google AI. Its main goal is to allow the Collateral Treasury desk to automate the collateral allocation process in the most optimal way on any given day. OPTIC’s architecture is based on microservices and provides the ability to handle large volumes of data, for which a scalable and self-managed infrastructure is needed.  OPTIC runs on Google Kubernetes Engine, which provides it with workload rebalancing, auto-scaling capabilities, and high availability. 

Additionally, we collaborated with Google Operations Research, which gave us access to the experience of Google AI engineers who were able to advise us on the best way to implement their optimization libraries to solve our business problem.  

We’ve found that using linear programming solvers such as Google OR-Tools is the best way to achieve the optimization capability that fundamentally changes how we manage our inventory. It enables us to optimize for multiple outcomes and be certain that we are doing this in the most efficient way possible. 

Finding the optimal way forward with automation

OPTIC works by consuming data feeds from a multitude of systems, then it standardizes the data, and combines with decision-making parameters and weightings Google OR-Tools can use, to understand and arrive at an optimal outcome. OPTIC can also provide insights and metrics that help optimize business decisions such as which assets can be added or removed in the future to make collateral allocation even more efficient.

Looking forward, this project makes us optimistic about using Google Kubernetes Engine to manage more of our microservices in other platforms. This will mean that we can scale without worrying about hardware or making big changes to our environment. With this solution, we’ll be able to mobilize and optimize our collateral according to our own view of the value and quality of the collateral, as well as the best fit for our exposures at any given time.  

Over time, the project can bring visible long-term benefits to HSBC’s Markets business, including decreased operational risks and potential to save significant funding costs. Next, we will continue to add new capabilities and data sources to our solution to continue solving some of the most complex business challenges in our industry.

Blog

Data to Business Outcomes with Google’s Data Analytics Design Pattern

6754

Of your peers have already read this article.

1:30 Minutes

The most insightful time you'll spend today!

Google Cloud's Data Analytics Design Patterns, a cross product technical solution helps customers drive more value from data with access to over 30 data analytics solutions and design patterns based on the best of Google and its partners ecosystems.

Companies today are inundated with vast amounts of data from various sources. This overwhelming amount of data is meant to benefit the company, but often leaves data teams feeling overwhelmed, which can create data bottlenecks and result in a slow time to value. In fact, only twenty seven percent of companies agree that data and analytics projects produce insights and recommendations that are highly actionable (Accenture). This means that nearly 3 in 4 companies are not unlocking value in their data, which poses a huge challenge for organizations trying to move the needle and drive real business results. We at Google Cloud, however, saw opportunity in this challenge, which is why we created Data Analytics Design Patterns: cross-product technical solutions designed to accelerate a customer’s path to value realization with their data. These industry solutions bring together product capabilities alongside design methodology, open source deployable code, data models, and reference architectures to accelerate your business outcomes.

1 Data Analytics Design Patterns.jpg

With Data Analytics Design Patterns, you get access to more than 30 ready-to-deploy data analytics solutions. Design patterns leverage the best of Google and our rich partner ecosystem, including Technology Partners & System Integrators. In this blog, we will cover 3 examples on how a design pattern can be applied to unlock the value of data:

  1. Improve mobile app experience with Unified App Analytics
  2. Maximize digital shop’s revenue with Price Optimization 
  3. Protect internal systems from security and malware threat with Anomaly Detection 

Unified App Analytics

If mobile apps are part of your go-to-market strategy, you have several data sources that can provide invaluable customer insights. In addition to tools such as CRM (e.g. Salesforce) and customer care (e.g. Zendesk), you likely use Google Analytics to log app events and Firebase Crashlytics to gather data about app errors. But can you easily combine back-end server data with app front-end data to unlock customer insights? 

The Unified App Analytics design pattern makes it easy to plug all the disparate data sources into a single warehouse (BigQuery) and start analyzing it with a Business Intelligence tool (Looker). Once you have a complete and real time view of your customer experience with your app, you can take action. For example, if you notice an increase in app errors, you can quickly combine your Crashlytics data with your CRM data to narrow down the crashes with the highest revenue impact and prioritize their resolution. Further, you can automate your issue resolution workflow by creating a rule for any future crash that impacts a subset of VIP customers.

2 Data Analytics Design Patterns.jpg
Unified App Analytics turns your data warehouse into an actionable customer insights tool

With the Unified App Analytics design pattern, you’ll gain access to valuable insights about your user experience with your app so you can inform your future app strategy. For example, NPR, an American media company, increased user engagement by showing content that better mapped to listener interests and behaviors.

Price Optimization

In a competitive and hectic global marketplace, strategic pricing matters more than ever, but often projects are consumed by the tedium of standardizing, cleaning, and preparing data—from transactions, inventory, demand, among other sources.

Price Optimization solution allows retailers to build a data driven pricing model. The solution consists of three main components:

  • Dataprep by Trifacta: integrates different data sources into a single Common Data Model (CDM). Dataprep is an intelligent data service for visually exploring, cleaning, and preparing structured and unstructured data for analysis, reporting, and machine learning.
  • BigQuery: allows you to create and store pricing models in a consistent and scalable way as a serverless Cloud Data Warehouse service
  • Looker dashboards: surface insights and enable business teams to take action with enterprise ready BI platform

With the Price Optimization design pattern from Google Cloud and our partner Trifacta, you’ll be able to rapidly unify multiple data sources and create a real-time and ML-powered analysis, leveraging predictive models to estimate future sales. For example, PDPAOLA, an online jewelry company, doubled sales with dynamic pricing adjustments enabled by a single data view.

3 Data Analytics Design Patterns.jpg

Anomaly Detection

Organizations need to anticipate and act on risks and opportunities to stay competitive in a digitally transforming society. Anomaly detection helps organizations identify and respond to data points and data trends in high velocity, high volume data sets that deviate from historical standards and expected behaviors, allowing them to take action on changing user needs, mitigate malicious actors and behaviors, and prevent unnecessary costs and monetary losses.

The Anomaly Detection design pattern uses Google Pub/Sub, BigQuery, Dataflow, and Looker to:

  • Stream events in real time 
  • Process the events, extract useful data points, train the detection algorithm of choice
  • Apply the detection algorithm in near-real time to the events to detect anomalies
  • Update dashboards and/or send alerts

The challenge of finding the important insights and anomalies in vast amounts of data applies to organizations across all industries and lines of business, but is especially important to protecting the security of an organization. For example, TELUS, a national communications company, modernized their security analytics platform leveraging this pattern, allowing them to detect anomalies in near real time to detect and mitigate suspicious activity.

Get started

Turn your data into business outcomes with Google Cloud and our broad partner ecosystem by deploying Data Analytics Design Patterns at your organization. There are more than 30 Data Analytics Design Patterns ready for you to use. We have more than 200+ more ideas in the pipeline, so be sure to check in regularly as new patterns will be added soon. 

To dive deeper and find out more about how Data Analytics Design Patterns can help your organization accelerate use cases and create faster time to value, check out this video.

3564

Of your peers have already watched this video.

2:30 Minutes

The most insightful time you'll spend today!

Case Study

Google’s AutoML Vision Helps AES Fight Climate Change

Global warming is one of the big challenges of our times; if not the biggest challenge of our times, says Andres Gluski, President and CEO, AES, a Fortune 500 company that generates and distributes renewable energy in 15 countries to help end climate change.

AES relies on Google’s AutoML Vision to assess damage to its hundreds of wind turbines. It uses drones to inspect and photograph its turbines, but these drones typically take 30,000 images, and each one must be examined–which can be extremely time-taking.

With Google Cloud’s AutoML Vision, AES can use machine learning to auto-detect damage so that engineers can spend less time identifying damage and more time repairing it.

8439

Of your peers have already watched this video.

21:00 Minutes

The most insightful time you'll spend today!

Webinar

Journey to Transformation and Modernization with Google’s Distributed Cloud

Google Cloud has been leading the way of helping businesses make most from their cloud investments to drive digital transformation through modern application platforms that cater to today’s customer needs. Watch the video from the Next ’21 to explore three areas where companies are supported by Google Cloud throughout their cloud evolution journey–cloud migration and modernization, extension of services and engineering practices to hybrid and multicloud environments, and delivery of high performance with planet scale distributed infrastructure. Also, learn how Google Cloud is equipped for more complex and unique use cases, from datacenter to the edge. Hear the strategies and customer stories that can help your business modernize people, processes, and applications to fully leverage Google’s distributed cloud!

Blog

Google and AI Researchers Work towards Building Data-centric AI

6098

Of your peers have already read this article.

1:30 Minutes

The most insightful time you'll spend today!

Read to explore Google's contribution to data-centric AI to help AI researchers and engineers come up with better AI solutions. Learn how Google Cloud researchers and its Public Dataset Program are dedicated towards better data for better AI!

AI researchers and engineers need better data to enable better AI solutions. The quality of an AI solution is determined by both the learning algorithm (such as a deep-neural network model) and the datasets used to train and evaluate that algorithm. Historically, AI research has focused much more on algorithms than datasets, despite their vital importance. As a result, many algorithms are freely available as starting points, but many important problems lack large, high-quality open datasets. Further, creating new datasets is expensive and error-prone.

Recently, the data-centric AI movement has emerged, which aims to develop new methodologies and tools for constructing better datasets to fix this problem. Conferencesworkshops,  challenges, and platforms are being launched to support improving data quality and to foster data excellence. Thought leaders such as Andrew Ng at Landing.AI and Chris Re at Stanford University are encouraging AI developers to focus more on iterative data engineering than they do tuning their learning algorithms. Our CHI-best-paper-award-winning paper, “Everyone wants to do the model work, not the data work” highlighted the significance of data quality in the practice of ML. 

At Google, we are excited to contribute to data-centric AI. Today, Google Cloud is adding a new high value dataset to the Public Dataset Program, and Google researchers are announcing DataPerf, a new multi-organizational effort to develop benchmarks for data quality and data centric algorithms.

Google Cloud is committed to helping users improve their data quality, starting with supporting better public data. The Public Datasets program provides high quality datasets pre-configured on GCP for easy access. Google Cloud is adding a new high-value dataset developed by the MLCommons™ Association (which Google co-founded) to the Public Datasets program: The Multilingual Spoken Words Corpus: a rich audio speech dataset with more than 340,000 keywords in 50 languages with upwards of 23.4 million examples.

This new public dataset is aligned with the MLCommons Association vision for “open” datasets – accessible by all – that are “living” – continually being improved to raise quality and increase representation and diversity.

Google researchers, in collaboration with multiple organizations, are announcing the DataPerf effort at the NeurIPS Data-Centric AI workshop today, to develop benchmarks to improve data quality. Much like the the MLPerf™ benchmarking effort which is now the industry standard for machine learning hardware/software speed, DataPerf brings together the originators of prior efforts including: CATS4MLData-Centric AI CompetitionDCBenchDynabench, and the MLPerf benchmarks to define clear metrics that catalyze rapid innovation. DataPerf will measure the utility of training and test data for common problems, and algorithms for working with datasets such as: selecting core sets, correcting errors, identifying under-optimized data slices, and valuing datasets prior to labeling.

Together, supporting open, living datasets for core ML tasks, and the development of benchmarks to direct the rapid evolution of those datasets will empower the researchers and engineers who use Google Cloud to do even more amazing things – and we can’t wait to see what they create!


Acknowledgements: In collaboration with Lora Aroyo and Praveen Paritosh.

Blog

Harnessing the Power of Data and AI to Transform Life Science Supply Chains

3986

Of your peers have already read this article.

3:30 Minutes

The most insightful time you'll spend today!

Maximize efficiency and make data-driven decisions in your life science supply chain by harnessing the power of data and AI. Discover how advanced analytics and machine learning can enhance visibility and control.

Global life science supply chains are lengthy and complex with many moving parts. One small disruption can create serious delays and affect your ability to deliver therapeutics for patients.

Supply chain disruptors

Over the last few years, healthcare organizations have encountered a range of obstacles, from both internal and external factors, that have resulted in supply networks failing to get drugs and medical devices to where they need to be on time. These obstacles include:

  • Labor and supply shortages
  • Rising material costs
  • Raw material constraints
  • Geo-political events
  • Unpredictable weather

How do you overcome supply chain disruptors that are out of your control?

The intelligent healthcare supply chain

While many organizations have already implemented data-driven supply chains, organizations are still faced with the challenges of static, siloed, and different functional supply chain applications; limited data exchange with key trading partners across upstream and downstream operations; and the inability to effectively leverage relevant external data.

At Google Cloud, we believe the key to meaningful and effective change is a data-driven supply chain that allows you to achieve visibility, flexibility, and innovation.

Our solutions help you prepare for the unpredictable and enhance the value of your data. By unlocking AI-driven insights, you can strengthen distribution networks and optimize your workflows and supply chains to become more reliable, intelligent, and sustainable. Some of the business challenges we address include:

Make sure you’re prepared for the unpredictable with real-time visibility over your distribution networks. Learn how you can harness the power of AI and analytics and gain actionable insights that enhance your supply chain.

More Relevant Stories for Your Company

Trend Analysis

Google Research: Themes from 2021 and Beyond

Posted by Jeff Dean, Senior Fellow and SVP of Google Research, on behalf of the entire Google Research community Over the last several decades, I've witnessed a lot of change in the fields of machine learning (ML) and computer science. Early approaches, which often fell short, eventually gave rise to

Blog

Google is a Leader in the 2023 Gartner® Magic Quadrant™ for Enterprise Conversational AI Platforms

We’re excited to share that Gartner has recognized Google as a Leader in the 2023 Gartner® Magic Quadrant™ for Enterprise Conversational AI Platforms, authored by Bern Elliot and Gabriele Rigon. We believe this recognition is a testament to Google Cloud’s robust investments and commitment to innovation in AI, coupled with

Blog

Streamline Your Business Processes with Google Cloud’s Custom Document Splitter

Businesses rely on processing an inflow of documents to drive processes and make decisions. Many such documents are combined into a single file. For example, a loan application may have a driver’s license, paystub, W2, bank statement, and other document types within a single file. The complexity of handling many

Blog

10 Reasons that Make Google Cloud the Champion of IaaS

When you choose to run your business on Google Cloud you benefit from the same planet-scale infrastructure that powers Google’s products such as Maps, YouTube, and Workspace.  We have picked 10 ways in which Google Cloud Infrastructure services outshine alternatives in the market in how they simplify your operations, save

SHOW MORE STORIES