Using effective voice and electronic communications monitoring and supervision technology can prevent wrongdoing in Financial Firms before it begins.
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The FCA’s latest Market Watch (number 66) released this week, makes clear yet again that the regulator is notifying firms to strengthen effective monitoring of their front office employees to ensure compliance with regulations, with a focus on employee behaviour, prevention of market abuse and monitoring for other financial crime.
But how do you prevent financial crime? Where are the leading indicators of potential wrongdoing to be found?
Are you expected to be a seer of the future, a compliance and risk superhero crime fighter?!
No, of course not – but the expectations of the regulators are increasing, and the amount of information to review and analyse is growing in breadth and complexity as the way we work is changing constantly.
Your role in your firm is to deliver regulatory compliance, and push best practice, however, for job satisfaction, I’m sure you would prefer to identify potential risks before they occur and support staff in your organisation to make better choices. Rather than trawling through endless amounts of data and communications after a conduct issue has already been committed – Turning your role from prevention into just looking for a needle in a haystack.
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But how? It’s is a big ask, there’s only so many hours in the day, and there are so many obstacles in the way for most compliance & risk professionals – poor processes, ineffective tools and technology, and silos of unstructured data.
Where to start a prevention strategy? Particularly where to focus your time and effort when reviewing, analysing, and investigating structured market date or unstructured communications data.
What is structured data and unstructured data?
| Structure Data | Unstructured |
| Is clearly defined and searchable types of data | Is stored in its native format |
| Is quantitative | Is qualitative. |
| Is stored in data warehouses | Stored in data lakes |
| Easy to search and analyse | Requires more work to process and understand |
| Exists in predefined formats | Originates in a variety of formats. |
Structured Data is pre-disposed to analysis and investigation as it is always in a standardised, searchable format (numbers and text).
Unstructured Data comes in so many formats that standardisation for investigation is difficult – for instance raw recorded phone call files, or instant messages.
To put it in clearer context: Structured data is machine generated language vs. Unstructured Data is human generated language.
This, therefore is where the biggest issue lies for compliance & risk professionals. There are many tools to make sense of and automate monitoring and investigation of structured, machine generated data, particularly in financial services. But structured data will generally provide detail ONLY on wrongdoing that has already occurred or is occurring.
Your opportunity to identify wrongdoing, before it has happened is in the analysis of unstructured, human generated, communication data. Intent for wrongdoing comes from the people, not machines.
Traditionally random sampling of electronic communications (e.g. email, voice, Bloomberg & Instant Message) has been the only way to happen across wrongdoing before its occurred – this presents a multitude of not just ethical conundrums, but also potential breach of GDPR rules – why would you be checking up on any one person in your organisation without reasonable evidence of wrongdoing? Also in the entire history of the financial markets the amount of market abuse detected by random sampling is so low it’s negligible. Usually communications are only reviewed if an investigation is already underway. Typically after being triggered by structured data analysis, an alert from an internal system, whistle-blowers, external regulators or auditors.
So how do you find intent of wrongdoing in unstructured data – in an achievable, efficient way?
By arming compliance teams with technologies that can analyse large volumes of unstructured communications, feeding a process to that informs the risk analysis and investigations that result in a regulator satisfying supervision function. Technology is an enabler for efficiency and best practice.
What is truly transformative for firms is the ability to integrate multiple systems to create a ‘holistic’ supervision process. The process provides automated analysis of both structured and unstructured data to provide a ‘front to back’ window on a firms activity. This will allow you to discover pre incident ‘intent’ as well as post incident wrongdoing.
Seems too good to be true? Well its not.
The Fingerprint Platform gathers unstructured communications data, and indexes it into searchable, structured data. It transforms previously unmanageable volumes of information into manageable, searchable and analysis ready data. It provides structured, simple & effective workflows to facilitate your investigation processes. Granting compliance professionals the time and tools needed to utilise human skills of identifying human behaviour, applying reason and using investigation skills.
Importantly, with our focus on our API and our continuously growing network of technology partners – we are able to seamlessly integrate the Fingerprint Platform with any other API driven system to create effective holistic supervision and investigation tools and processes that analyse, risk rank and facilitate investigation of structured and unstructured data.
