The Bombay Stock Exchange (BSE) has been at the forefront as far as adoption of new technology is concerned. From being the first innovators to use surveillance as a service model to migrating to open source ones to using Artificial Intelligence in novel ways, the organization has set new benchmarks during its digital journey. It has indeed come a long way. Most interestingly, it has leveraged the digital to enable business: from getting into new markets to providing greater security for transactions. In an exclusive interview , Kersi Tavadia (KT), CIO, BSE talks to Muqbil Ahmar (MA), Executive Editor, Grey Head Media about the organization’s plans as well as the challenges which lie ahead.
MA: Trust and transparency are critical to BSE’s operations. How is technology helping the exchange adhere to a rigorous compliance framework?
KT: Our market surveillance platform has gone a very long way in bringing a very high level of integrity and transparency in the market. It is an instrument of trust. We were the first innovators to use the platform for surveillance as a service model. We first developed for the exchange and then extended it to our broking members also to use it with zero cost to them. While the exchange monitors the brokers’ behavior, the brokers themselves do the same thing for their clients. We send them regular alerts and anything that is not following a regular pattern is traced in real time and an alarm is raised. It is a kind of auto ticketing system and the entire action is workflow based. The broker has to close the ticket either as a false positive or action taken so that it is tracked. It is fully customizable and brokers can set whatever kind of alerts they want to see. Now our broker members also don’t have the excuse of not regulating their own client behaviors or patterns and of not being aware. This has ensured total transparency and trust between the market participants and the investors.
MA: Data is the new oil. How have BSE’s technology systems evolved over the years to leverage data better?
KT: Till a few years back BSE was a collector’s item of all kinds of proprietary technologies and used all top of the line technologies. But, the main challenge was that even though those technologies were the best of their time and era, they were very difficult and expensive to maintain and upgrade. As trade volumes and transactions started exploding, expanding the traditional data warehouse was prohibitively expensive. Also, a lot of systems were operating in silos. We had to break the silos of data and bring it to one place to provide a single version of truth. If the data is stored in 10 systems then there are lots of discrepancies in the various versions of data. The job was to bring everybody into one system. We carried out a data warehouse migration activity and completely moved from proprietary technologies to Hadoop.
Secondly, we were able to converge all our systems. For all our reporting systems we tried to convert them into a web. We created a data lake so that all our regulatory reports happen from the main system that is our data warehouse system. All transactional reporting happens from individual systems. So we have the data at a place from which historical reports can be made.
My transactional systems have become lighter and other costs have also gone down. When you have such large data then you have to back them up and retain them. There are so many costs involved. Even when you want to restore it is time consuming. You may require a very small data but the data warehouse is so large that it might take days and hours. So there are a lot of costs involved when you don’t streamline or consolidate your data. It was a migration strategy and cleansing of data. Then we started building analytics to use the data.
MA: What’s on top of your list of priorities for BSE in terms of technology adoption?
KT: Migration to the cloud wherever possible with focus on two areas – cost optimization and security. Cloud has its own advantages and disadvantages. BSE’s application models do not warrant too much of on cloud presence. We retain a majority with us. But wherever possible we try to leverage the cloud. We are doing a lot on the AI front. We are also hoping to do a cybersecurity center for financial markets. Our plan is to build a cyber SOC as people have been approaching us for it. That is a near future plan.
MA: What key initiatives are you undertaking around AI?
KT: BSE is using AI for doing real-time surveillance and does a lot of fraud detections and rumor analytics using the technology with a success rate of 95-97%. This is how AI is helping BSE put checks and balances in place and control rumors. If there is any news about a listed company then the surveillance department generates an automatic mail to the companies informing them of the development. Whatever clarification the company gives is immediately put out on BSE’s website so that if people want any information they can have it.
While earlier this used to happen once every day, now with all the automation it can be practically done every 15 minutes. Besides this, we are also doing a lot of high-powered computing from social media and working on speech recognition on the AI front. For instance, the exchange records the interview on any TV channel. If somebody is giving a live interview then the system can immediately correlate it with the market, inform how it has impacted the market and show the trending analysis. AI is never a product. It is always a journey with continuous learning. If you are not learning continuously then you can’t build intelligence.