Algorithm Assurance Services

Ensuring algorithms work as intended

Algorithms are used extensively in many industries. Algorithm assurance is the process that test whether those algorithms conform to their intended goals and achieve the desired outcomes.

Driving Innovation and Business Opportunities

Algorithms are already being used extensively in many different sectors, and in financial services particularly, they are being used in automated trading to execute trades, by robot-managed funds to allocate portfolios and by loan providers for consumer credit scoring. Algorithms are even being used to predict fraudulent credit card payments or unusual trading activity.

Algorithm assurance is the process which tests whether those algorithms are conforming to their intended design goals and achieving the desired outcomes.

Advanced and emerging technologies offer the promise of transformation to almost all types of business. The capabilities, prevalence and complexity of algorithms has evolved and there are a myriad of algorithm designs that are tailored to address specific problems. Algorithms are used extensively in different market sectors. For example:

  • Machine learning algorithms are used in the health care industry to identify cancerous tumors;
  • Neural networks algorithms are used by businesses to aid in sales forecasting, customer profiling and data validation;
  • Pattern recognition algorithms are used in speed cameras to identify over-speeding vehicles;
  • Predictive systems are used to provide a best assessment of the likelihood of future outcomes on statistical and historical data; and
  • Rules-based algorithms are used in the wholesale financial markets to automatically determine order initiation, generation, routing or execution on an exchange, without human intervention.

The use of intelligent algorithms offers a wide range of potential benefits to organizations. However, algorithms have the potential to produce unexpected and unintended results, and risks of algorithms malfunctioning causing a wide-range of consequences for all stakeholders. The effects of ill-designed algorithms could result in financial losses, harming firms’ reputations, regulatory implications, severe disruptions to operations and (in extreme instances) could also result in the loss of human life. The activities handled by algorithms typically occurs at great speed, thereby amplifying existing risks if risk management and other controls are not effective. With increased volumes of data, processes automation and decisions being made by algorithms, you will need assurance that your algorithms are working as intended and achieving the desired business outcomes. Our offering specifically focuses on areas where you might be most vulnerable, algorithms operating in environments outside of their ERP, potentially posing real or dormant business and reputational risks.

Our Algorithmic Assurance Offering

Key Contact

Dishell Gokaldas

Dishell Gokaldas

Partner, Audit & Assurance

Dishell has over 19 years of experience in Market Risk, Algorithmic Assurance, Risk Methodology and Model Validation. He has extensive knowledge of cross-asset modelling inclusive of Pricing, Valuatio... More