Humans mostly sort out mismatched Ops data and provider Duco wants to dramatically change that situation.
(Duco describes itself as a no-code data automation company that helps clients consolidate, standardize, and reconcile key data types in Duco’s cloud. Its mission is to dramatically reduce the 60 percent of data processing that happens manually via its Data Automation Platform. FTF News recently spoke with James Maxfield, chief product officer at Duco, about the provider’s mission. Before Duco, Maxfield held senior leadership roles in operations and technology at major global capital markets organizations such as UBS, Lehman Brothers, and Nomura. Most recently, he co-founded a boutique consulting practice that helped financial institutions overcome complexity across their middle and back offices.)
Q: Let’s start with Duco’s Data Automation Platform. How does it define Duco? What are its strongest features for capital markets operations?
A: The Duco platform is a fresh approach to the industry’s long-standing challenges. Doing things differently is in our DNA as a company, and this comes across in the platform’s core features, including:
- A.I.-powered adaptive Intelligent Document Processing (AIDP) technology, which enables clients to extract data from unstructured documents such as PDFs and emails, using customized, supervised models trained on their specific document types and improved through human interaction;
- Proprietary no-code functionality, which empowers business users to quickly build data controls, or make changes to existing processes, without having to depend upon IT;
- A cloud-based platform from the beginning. As well as being significantly more scalable than on-premise systems, it enables clients to benefit from a steady stream of innovation and updates, all delivered seamlessly, it also frees them from the many expenses surrounding on-premise technology, including hardware, maintenance, and IT headcount;
- Our unique matching engine, which delivers significant improvements in match rates, reducing the number of false exceptions. One client switching to Duco experienced 40 percent fewer breaks in their cash reconciliations, while another saw matching rates climb from 60-to-70 percent with their on-premise tool to 90-to-99 percent on Duco; and
- Automated exception management, removing a lot of the manual work from labeling, commenting, and assigning exceptions for investigation.
Q: What do you see as the top data management problems among capital markets firms? What is Duco’s response to those pain points?
A: The industry spends a lot of time and money each year supporting inefficient data processes.
Sixty percent of data processing happens outside of core automation platforms, with humans manually extracting and rekeying data, transforming it, and then managing breaks frequently caused by poor matching. Duco’s vision is to reduce the time spent on data-related functions in operations and finance departments by 90 percent.
To do this, our platform features flexible data extraction of both structured and unstructured data, from CSV and ISO files to PDFs, emails and more.
The platform is data and format-agnostic, enabling it to easily adapt to a firm’s data needs. The platform uses a flexible Data Prep module to transform, normalize and enrich data without a separate extract-transform-load [ETL] platform or tool, and a wide-ranging reconciliation module for use cases from cash to derivatives and regulatory reporting.
Features such as fuzzy matching and user-defined tolerances filter out the ‘noise’ from false exceptions.
Across the platform, the interfaces are intuitive and user-friendly, and the platform easily integrates with downstream systems such as visualization tools for analytics, reporting, or further uses.
James Maxfield
Q: Could you tell me about the origin of the Data Automation Platform? How has it been enhanced over the past year?
A: The Duco platform was founded on the belief that financial services firms needed a radically different approach to managing their data – one that wasn’t on-premise, hard-coded, and highly technical.
We knew that by using the computation power of the cloud and by building our proprietary matching algorithm and no-code Natural Rules Language (NRL) we could offer firms a smarter, more agile, and more efficient way to ensure the accuracy and trustworthiness of their data.
In the last year, we launched our AIDP capabilities for reconciliation. This enables users to harness artificial intelligence to extract and reconcile data from unstructured formats and images automatically. Eighty percent of enterprise data is unstructured, so this capability solves a major industry pain point for our clients.
We also added continuous scaling upgrades and enhanced control, oversight, and evidencing for our cash solution, as well as launching an accelerated solution for European Market Infrastructure Regulation (EMIR) Refit readiness. It includes support for the ISO XML schema, automatic process template updates, reconciliation, and operational dashboards.
Q: Over the coming year, what changes are being planned for the platform?
A: Over the next year, we will continue to expand our AIDP offering to introduce new use cases and additional features such as automatic document classification. We will also integrate our proprietary no-code NRL functionality, enabling business users to train and deploy AI models.
We plan to expand our exception management workflow, including A.I. capabilities, to help automate activities including searching, labeling, assigning, repairing, and signing off.
We will also incorporate A.I. and other new capabilities to extend the functionality of our data preparation module and enhance dashboards for monitoring, actions, insights, and reporting
Q: Why are your clients and other financial services firms looking for a data management platform?
A: There are many challenges firms are looking to solve with data automation.
The most common are improving operational efficiency, cutting costs, reducing risk, being more agile, or freeing up their teams to undertake more valuable work.
While every client’s use case and circumstance are unique, their ultimate goal often falls into one of those buckets.
These desired outcomes often arise due to the inefficiencies of on-premise technology. These systems come with several hidden costs on top of the license fees: hardware and maintenance, IT resources, and the cost of upgrades. For example, one tier one bank told us they spent three years and $5-10m on a mandatory upgrade of a 10-year-old legacy system, which involved rebuilding every reconciliation, for no added value.
If firms are using hard-coded on-premise technology that has to be managed by their IT team, it means their operations are slow to adapt to new business requirements, and probably require a significant number of manual processes to keep them running. This is slow, expensive, and introduces a lot of operational risk.
Teams spend their time carrying out the same repetitive and low-value data tasks instead of being able to add value to the business.
All these are either caused by or result in, data that can’t be trusted — when firms have confidence in their data, they can act faster, understand their operations clearly and stay compliant.
Q: What advice would you give to a firm searching for a new data management solution?
A: It’s important to understand that technology has moved on — it’s possible to use it differently from what you’re used to.
The most successful Duco clients are the ones who think about how their processes could be different on the platform, rather than simply trying to recreate the same kinds of legacy processes and workflows that they’re used to with an on-premise system that hasn’t been updated in years.
Data automation is more than just technology — it’s a practice that can help firms reshape their operating models in a data-centric way to achieve their strategic goals. The pain points and challenges laid out above show that the current way of managing data is unsustainable. Be sure to uncover whether any vendor is trying to help you escape those challenges once and for all, or just promising you a slightly more efficient version of what you already have.
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