AI-Assisted Trade Validation & Risk Analysis

You are a Middle Office Analyst at an investment bank. Your team is testing how AI can help analyse trade data.

You will provide trade information and clear business rules to an AI tool. The AI will identify trade problems, assign a risk level, and suggest the required action.

You will then compare the AI's results with the expected/manual results to check whether the AI has given the correct answer.

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AI_MiddleOffice_Blank.xlsx : Link

Pre-Lab Preparation

Lab File

AI_MiddleOffice_Completed.xlsx : Link

Before asking AI to analyse the trades, you must first complete a manual baseline analysis so you have something to check the AI against.

Open AI_MiddleOffice_Blank.xlsx

Open the Raw_Trade_Data worksheet

Review these columns:

• Trade ID

• Ticker

• FO Quantity

• FO Price

• Broker Quantity

• Broker Price

• Confirmation Status

Perform the Manual Analysis

Open the Manual_Analysis worksheet. You must complete this sheet using Excel formulas to create your baseline.

1. Check Quantities: In Cell B2 (under Quantity Match),

enter =IF('Raw_Trade_Data'!C2='Raw_Trade_Data'!E2, "Match", "Break")

2. Check Prices: In Cell C2 (under Price Match), enter =IF('Raw_Trade_Data'!D2='Raw_Trade_Data'!F2, "Match", "Break")

3. Assign Risk Level: In Cell D2, enter

=IF(OR(B2="Break", C2="Break"), "High", IF('Raw_Trade_Data'!G2="Unconfirmed", "Medium", "Low"))

4. Assign Action: In Cell E2, enter

=IF(D2="High", "Investigate Trade Break", IF(D2="Medium", "Follow Up with Broker", "Clear for Settlement"))

Open the AI_Comparison worksheet

4

You will enter the AI results here later and compare them with the manual results you just generated.

The AI needs clear instructions to understand what it should check.

Open ChatGPT, Gemini, Claude, or another approved AI tool

1

Attach the excel document and enter the following instructions

2

Act as a Senior Middle Office Analyst. Analyse each trade using these rules:

• Compare FO Quantity with Broker Quantity and FO Price with Broker Price.

• If either value is different, classify the trade as High Risk.

• If the values match but the trade is Unconfirmed, classify it as Medium Risk.

• If the values match and the trade is Confirmed, classify it as Low Risk.

Actions required:

• High Risk → Investigate Trade Break

• Medium Risk → Follow Up with Broker

• Low Risk → Clear for Settlement

Return the results in a table with: Trade ID | Risk Level | Action

Act as a Senior Middle Office Analyst. Analyse each trade using these rules:

• Compare FO Quantity with Broker Quantity and FO Price with Broker Price.

• If either value is different, classify the trade as High Risk.

• If the values match but the trade is Unconfirmed, classify it as Medium Risk.

• If the values match and the trade is Confirmed, classify it as Low Risk.

Actions required:

• High Risk → Investigate Trade Break

• Medium Risk → Follow Up with Broker

• Low Risk → Clear for Settlement

Return the results in a table with: Trade ID | Risk Level | Action

Submit the prompt and wait for the AI's response

3

Check whether the AI has correctly analysed each trade.

Look for:

• Correct Trade ID

• Correct Risk Level

• Correct Action

• Pay particular attention to trades where the quantity or price does not match.

The AI checked each trade by comparing the Front Office (FO) quantity and price with the Broker's quantity and price, and also checked whether the trade was confirmed.

• TRD-8001, TRD-8005, TRD-8007: Everything matches and is confirmed → Low Risk → Clear for Settlement

• TRD-8002, TRD-8006: Trade details match, but confirmation is pending → Medium Risk → Follow Up with Broker

• TRD-8003: Quantity does not match → High Risk → Investigate Trade Break

• TRD-8004: Price does not match → High Risk → Investigate Trade Break

In simple terms: AI found 2 high-risk, 2 medium-risk, and 3 low-risk trades and suggested the appropriate action for each.

Task 4: Compare AI Results with the Manual Analysis

Now check whether the AI produced the same results as the manual analysis.

Copy the AI's results

1

Open the AI_Comparison worksheet

2

Paste the AI's Risk Level and Action into the appropriate columns

3

Compare the AI results with the manual results

4

In Column D – Match with Manual?, enter:

• Yes – if the AI result matches.

• No – if the AI result is different.

In Column E – Notes / Observations, record important details about how the AI performed

5

1. Click Cell E2.

2. Type your observation (e.g., "AI correctly identified the trade break" or "AI assigned the correct risk level").

3. Press Enter to save the note and move down.