26 October 2017
2
4
Dodd-FrankUnited States Legislation
for Swaps
• Record Keeping
(Recording)
• Trade Reconstruction
MAREuropean Directive
• Detecting Market Abuse
• Detect and Prove Intent
Even if Unsuccessful
Code of ConductGlobal Guidance for FX
MiFID IIEuropean Directive
January 2018
Refers
to
• Surveillance in Place to Detect Market Abuse
• Record Keeping (Recording)
• Trade Reconstruction
2013 2016
6
PRE-TRADE TRADING TRADE OPERATIONS POST-TRADE
“Can I get a
quote for..”“Done deal..”
“Have a large
deal coming
for...”
“Will make the
changes..”
“Confirmed..”
“The deal is
cleared..”
Sales Trader with Client Trade Support with Back OfficeTrade Support with Sales TraderTrading Desk with Sales Trader
“Can you
recommend..”
“What are you
hearing
about..”
Market Views Bid/Ask Market sounding News Negotiations Confirmations Settlements TransfersQuotes Amends Cancels Reconciliation
7
Disparate systems and multiple data types complicate the identification of relevant information
Desk Phone
Trading Turret
Mobile Phone
Instant Messages
Chat rooms
Corporate emails
OMS Data
Trade Systems &
Reporting Data
• Siloed data
• Excessive data
• Different meta data
• Different tools to access the data
What do you have?
• How do you identify the first place to look?
• How do you find all the relevant data?
• How do I find and connect to all relevant data
together?
• How do I understand a valid output
Where do you start?
Alerts
8
Turrets MobileVoice Email NewsChat Trades OMS DataTrade
Data
Text Analytics RelevancyNatural Language IndexingIntelligenceBehaviorsAnalyze
ManageIdentify Investigate
Timeline
ReconstructionDocument
Aggregate the data in a single solution
Index, clean and enrich the data
Analytics to sort and categorize the data
automatically
All data is fully searchable in single
interface
Ability to create full trade event
reconstruction with timeline review
Machine driven correlation to instantly find
related conversations and content across
100% of the data within the system
Enables Analysts and Investigators to
identify potential anomalies in visual result
sets
Policy-Driven Workflows with Automated
Actions to collaborate, attach relevant
information and escalate within the frim
compliance processes
Packaging
Speech Analytics
10
• Targeted risk-based scoring policies to
analyze every form of communication
in the organization and prioritize items
for review
• Automated, Auditable Selection
Policies to assign review items
• Random Sampling Selection Options
for full coverage
• Personal Dashboards to Analyze
Communications for Review
Assignment
• Simplified Process for Reviewing
Communications
10
• Guarantee that all regulated content is
available for Supervision &
Investigations
• Document the effectiveness of the
policies & process to drive continuous
improvement
• Provide evidence of Compliance
Monitoring and that issues are being
handle efficiently across the
organization
1111
Review and Report
Compliance Risks
COLLECTIONALL
COMMUNICATIONSRELATED TO FINANCIAL
TRANSACTIONS
REPORTING
Collect, Manage and
Enrich All Trading
Communications
Risk Scoring to
Detect Compliance
Issues
SUPERVISION
Search and
Reconstruct Trades
TRADE RECONSTRUCTION
12
14
Get insights by
visualizing results and
incorporate into user
supervision workflow
Collect
comprehensive
structured and
unstructured data
analysis and profiling
Apply unsupervised
machine learning
algorithms
ActAggregate Analyze
• Recognition of unusual patterns
and irregularities in data
• Detect extreme values that fall a long way outside of the other observations
Outlier Detection
15
Unknown Patterns
• Grouping a set of values in such a
way that values in the same
group are more similar to each
other than to those in other
groups
Clustering
• Automate the monitoring
and identification of
anomalous conversations
by highlighting participants
across trading groups and
trader roles
Irregular Associations &
Channel Usage
• Identifying Anomalous
Communication
originating from external
domains and unknown
conversation topics within
them
• Automate the monitoring
of all communication
activity during the FX
Fixing period
16
Topic and Communication
Analysis
• Identify irregular email
attachment and content
transmitted outside the
bank network
Anomalous Attachment
Handling
Time Sensitive Period
Monitoring
Monitor
messages for
changing
wording
discrepancies
Supplement
investigations
with related
participantsConnect
disparate
entity behavior
across
communication
channels
Detect new
communica
tion
patterns
Find
employees
violating
Chinese
walls
Proactively
monitor all
time
sensitive
periods
Retroactively
monitor
systems
messages in
context
17
• Capturing Feedback provides
continuous improvement in the
model and detection capabilities
Improvements over time
• Learn from past historical
behavior to uncover similar risks
and prevent recurring issues
History based
Trade Reconstruction and Proactive Supervision will be key to more effectively managing risk
18
Algorithm 2
Algorithm 1
Using combined
techniques
creates better
understanding
and confidence in
the output from
the model
analysis
Blending Rules-
based detection
methods and
machine learning
based algorithms
ensure increased
relevancy of results
19
• Analyze multiple communication
channels in context
• Identify unknown conversation risks
• Simplify model maintenance and
updates
• Enable more advanced detection
models with new data
• Increase reviewer productivity
• Shorten investigation resolution times
Cross-channel and cross
department analysis
Profiling and pattern
recognition
Advanced Analytics
Visualization
20
Multi-channel trade
reconstructionSiloed channels of info
Specific trader
behavior
Multiple suspicious traders
Webinar – November 30rd
Mastering Trading Communications Surveillance in Different Languages
Do you have multi-language traders that you want to monitor?
Using Language Identification, NICE Communication Surveillance solution is able to detect and analyze communications in
more than 20 languages. See how this works and what are the benefits.
www.HolisticSurveillance.com / webinars