FTF News got time with Yasuki Okai, president of Nomura Research Institute Holdings America, to talk about artificial intelligence, robotics and NRI's forays into North America.
(Editor’s note: Nomura Research Institute (NRI) won two honors in the 2017 FTF News Technology Innovation Awards competition: Best Clearing and Settlement Solution and Best New Post-Trade Solution. Unlike other industry awards events, the annual FTF Awards winners are chosen by a majority of qualified voters who are industry participants. FTF News reached out to Yasuki Okai, president of Nomura Research Institute Holdings America (NRI Holdings America) to review events in 2016 and to look ahead to trends that will impact securities operations. Okai oversees NRI’s governance and “expanding presence in North America across all service areas of consulting, financial IT and retail distribution,” officials say.)
Yasuki Okai, president of Nomura Research Institute Holdings America
Q: What major steps did NRI take to break into the North American market during 2016?
A: In June 2016, NRI acquired Cutter Associates, LLC.
Cutter has long been recognized as the leader in providing independent research on investment systems and services, with a subscription base of 200 firms around the globe. Acquiring Cutter Associates was a perfect strategic fit for NRI, and we are fully leveraging Cutter’s track record of success and clientele in North America.
Acquiring two firms in Australia was another global strategy for us that will also help us break into the North American market.
In September, we acquired ASG Group, a leader in cloud-based delivery of IT business solutions in Australia. In addition, we are currently in the process of acquiring SMS Management & Technology Ltd., an Australian IT service company that has advantages in providing consulting services and implementing IT systems for front-desk reception that is closely related to customer contact.
Through these global acquisitions, we are enhancing our capability of global delivery and expanding our clientele.
Q: What were the key developments in 2016 that helped NRI expand in North America?
A: We have started heavily investing in research on new technologies such as AI [artificial intelligence] and RPA [robotic process automation].
We see these new technologies as a great tool to increase the efficiency of post-trade operations, catering to the imminent needs of the industry. As a result of our investment, we have already completed various PoCs [proof of concepts] applying AI- and RPA-enabled solutions at financial institutions.
In the U.S., we have doubled the size of our team in 2016. Also, through the U.S. local acquisitions, our overall U.S. presence has drastically increased.
NRI’s value and offerings to the market have been appreciated by U.S. local clients. Our clients have acknowledged our unique combination of Japanese quality, India performance and U.S. knowledge, and enjoy our absolute commitment to quality and speed.
With our accumulated experience and knowledge, we are shifting our target from Tier 2 brokers to Tier 1.
Q: Why has NRI been working to apply artificial intelligence technologies to post-trade processes?
A: We have two reasons why.
First of all, one of NRI’s strengths is our knowledge and expertise in post-trade operations.
Finding new technologies and applying them to this area is a core mission as a company that spearheads the post-trade space.
Secondly, it is our duty to explore ways for financial institutions to improve their ROI [return on investment] further. We’ve already increased their ROI through digitization and STP [straight through processing], but more optimization cannot be accomplished without new technologies such as AI and RPA.
We strive for even more improved ROI through application of new technologies.
As of now, RPA is considered to be more suitable for post-trade operations — routine and large in volume.
However, we expect it to be applied to front-office operations, which is unstructured and more ad hoc, as the quality of AI technology improves over the course of the next five-to-10 years.
We also expect AI and RPA to spread even more as the microservice offerings and APIs grow.
Q: What other technologies is NRI interested in?
A: To name a few, Open API, distributed ledger technology [DLT], and Design Thinking, and Intelligent Automation, which combines robotics and AI.
NLP [natural language processing] is another focus as well because Japanese language presents a unique challenge to the application of NLP.
Q: What developments in 2017 might have a strong impact on NRI?
A: We look forward to more case studies of RPA and AI implementation.
In the meantime, control and governance are what we need to discuss.
Depending on whether placing human or business application systems under control, the organizational chart needs to be revised. Whom does the robot report to? Who will be in charge if the robot stops working? Those are the questions that we need to start thinking about as we develop more case studies.
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