introducing : supercharge your holistic trade surveillance ... · near miss reports. individual...
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Introducing :Supercharge Your Holistic Trade Surveillance Strategy
• Introductions
• Reflections on Holistic Surveillance
• Best Practice Holistic Surveillance Maturity Model Research
• Introducing SURVEIL-X: The First AI-Powered True Holistic Surveillance Platform
• Live SURVEIL-X Demonstration
• Questions & Answers
Today’s Presenters
3
Graham UreFinancial Crime Technology
Partner and Co-Lead for Market Abuse & Surveillance,
PwC
Steve LoGalboFinancial Markets Compliance,
Director of Product Management, NICE Actimize
Cromwell FraserFinancial Markets Compliance
Solutions Consultant,NICE Actimize
Tim ArmstrongFinancial Markets Compliance,Product Marketing Manager,
NICE Actimize
PwC reflections on holistic surveillance
NICE Actimize SURVEIL-X Webinar
17 October 2019
PwC
The current state of surveillance ~ facts and figuresFindings from the 2019 PwC Surveillance Market Abuse survey
80% of surveillance identified STORs identify insider dealing
Surveillance is largely performed in channel silos –truly holistic surveillance is aspirational
80% of participants will have automated voice surveillance in place in the next three years
Only 50% of participantswere satisfied with their trade solution,45% with theireComms solution
Less than 0.01% of EMEA alerts lead to a STOR
40 million - Alerts generated by 17 participant banks in the last 12 months
517 October 2019PwC reflections on holistic surveillance
PwC
Are we winning or losing the market abuse surveillance war?
Finding signals through the noise; has effective surveillance detection been swamped by the volume of false positives?
Can surveillance solutions and existing operating models manage the challenge of surveilling for more complex forms of market abuse such as cross product / cross market manipulation?
As surveillance has improved, has there been a co-evolution of bad actors finding more complex, subtle ways of abusing the market?
Has reality replaced hype; ‘Minority report’ style analytics giving way to the attritional nature of identifying and addressing data quality challenges?
617 October 2019PwC reflections on holistic surveillance
PwC
Designing the features of a holistic surveillance solution
Trade surveillance
Risk scoring of alerts. Capture of alert review outcomes to
support machine learning. Coverage of all asset classes. Ingestion of market data. Ingestion of behavioural data to
build trader profiles. More dynamic parameter setting.
eComms surveillance
Reduction in reliance on lexicons through the use of natural language processing techniques.
Analysis of metadata to better understand patterns of interaction.
Build metadata analysis outputs into the behavioural models.
aComms surveillance
More accurate transcription capabilities.
Integrated eComms and aComms Clustering of concepts of interest
Case management
Apply a trader centric view of alerts. Ability to profile trader behaviour and apply time series analysis to generate a time based risk lens. Ability to triangulate all three surveillance channels utilising time stamp data Ability to substantially, if not completely, work and resolve an alert from within the case management solution. Ability to apply machine learning to categorise alert types
717 October 2019PwC reflections on holistic surveillance
PwC
Bringing holistic surveillance to life ~ detection of potential insider trading
14.00Large transaction inCompany A.
13.35 14.00 15.35 15.37Risk
Individual is flagged as high risk due to historical behaviour. This could be based on P/L, training or near miss reports
Individual risk score
Trade dataMarket data
eComms
13.35 Phrase has been used 20 times in the last 10 days, 80% of usage followed by a trade. Flagged as potential code.
15.37Spike in trading in Company A in the market
Monitored trader
Market data
15.35News Alert – Company A involved in merger.
Voice / aComms
15.37Transcribed voice identifies traders congratulating themselves
817 October 2019PwC reflections on holistic surveillance
PwC
Holistic surveillance brings the promise of a step change in capability
True triangulation of alerts enabling a single richer picture of trading behaviour, and the elimination of surveillance silos.1
An opportunity to markedly reduce the volume of false positives and consequently spend more time better investigating a lower population of higher risk alerts. 3
Transformation in how surveillance is performed and reduction in the costs of compliance.4
Opportunity to step away from review of individual transactions to instead focus upon review of patterns to identify real anomalies2
917 October 2019PwC reflections on holistic surveillance
PwC
www.pwc.com
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
© 2019 PricewaterhouseCoopers LLP. All rights reserved. In this document, "PwC" refers to the UK member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.
Graham Ure, Partner
Email: [email protected]: +44 7889 644 672
Best Practice Holistic Surveillance Maturity ModelResearchResearch Conducted by
Best Practice Holistic Surveillance Maturity Model
RANDOM
SILOED
INTEGRATED
HOLISTIC
Random sampling of communications, with lexicon-based alerting‘One-size-fits-all' tuning across different markets and asset classes
Separate systems for:• Markets Surveillance• eComms SurveillanceTranscription, No Automated Voice SurveillanceMultiple Markets Surveillance systems for exchange-traded and OTC
Single Case Manager pulling alerts from systems for:• Markets Surveillance,• Integrated eComms
and Voice Communications Surveillance systems
Fully Integrated Markets and Communications Surveillance:• Advanced Machine
Learning (AI) and NLP monitoring
• Automated Trade Reconstruction
• Alerts based on multiple sources identify new risks not previously possible
• Detect ‘Intent’ of actions
Target State Capabilities
Random
Siloed
IntegratedHolistic
7%
26%
As random sampling of communications, with lexicon-based alerting with 'one-size-fits-all' tuning across different markets and assets classes
Each business controlling their own Market Surveillance system and eComms and voice surveillance are owned separately
A single case manager pulling alerts from systems for market surveillance and integrated eComms and voice communications surveillance
Fully integrated markets and communications surveillance
60%
7%
• We find that regardless of where a firm sees their operating model today, few are satisfied with status quo and are investing in key changes to their operating model
• All firms, regardless of size, have seen an opportunity to reorganize
• All respondents indicated that technology is becoming more important for their surveillance capabilities
All had a current global
monitored population of
250-2,000
Split between a global monitored population of over 50,000 individuals and 2,000-7,500
Survey respondent self-assessed target capability by mid 2021
250-2,000 2,000-7,500 7,500-50,000 50,000 or moreKey:
© JWG 2019 14Confidential
Take the survey by 31 October to get your free copy of the survey resultsJoin the JWG Trade Surveillance Interest Group Session: Overcoming barriers
to integrated surveillance: trade, voice, eComms, conduct and AML 5 November 16:30-18:00 at Barclays, Canary Wharf / dial in
Email [email protected] to register your interest
Next Steps
Intelligence Collaboration Actionable insight
www.regtechfs.com www.jwg-it.eu/collaboration www.RegDelta.com
Introducing SURVEIL-X
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The First AI-Powered True Holistic Surveillance Platform
AI-PoweredMulti-Dimensional
Analytics Powerful Case Management
Trade Reconstruction & Story Visualization
Comprehensive Coverage
Trades &Communications
Behaviors &Anomalies
Holistic Surveillance
Complete Surveillance Solution
What Does Provide?
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Multi-Dimensional Intelligence Capabilities to Improve Detection Accuracy
Analytics Optimization and Anomaly Detection via
ActimizeWatch
AI-Powered Analytics
OOTB and Self-Development
Comprehend risk detected
Intelligent Automation and
Design
SURVEIL-X is the first and only AI-powered True Holistic Surveillance solution designed to help Financial Institutions to automate compliance with key regulations including MAR, Dodd-Frank, FX Code of Conduct, MiFID II, MAS and Regulation Best Interest.
Complete Portfolio Offering
Full Regulatory Coverage
Data Coverage
Advanced Alerting
Fully IntegratedSurveillance
DATA & COVERAGE ANALYTICS STORY VISUALIZATION
•
Cloud-native SURVEIL-X ensures fast deployment, hassle-free upgrades and streamlined innovation to stay a step ahead of new regulations
SURVEIL-X cloud reduces infrastructure, operational, support and training costs
SURVEIL-X cloud improves scalability, resiliency and security
Analytics
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SURVEIL-X uses Multi-Dimensional Analytics
AI within SURVEIL-X finds undetectable risksSURVEIL-X empowers the end-user with self development tool box
Data
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SURVEIL-X includes market data service connects to 150+ real-time data sources including:
• Level 2 Data• OTC and Exchange Traded Instruments• News Sentiment • Ratings and benchmark data*
SURVEIL-X provides simple integration platform to pull in data:
• Trades, orders and executions• eComm’s data, email, chats social media• Voice conversations• Any additional data or documents
Actimize Analytics Engine
Adapter Engine
OMSIntegration
FIX Protocol
CustomerOMS Output Communications
Visual Alerts
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SURVEIL-X uses advanced alerting with visual display for instant investigation
SURVEIL-X uses machines to gather all this information you need
SURVEIL-X displays the full story detailing what was said and what was done
NICE Actimize
Financial Markets Compliance
for Buy Side for Sell Side for Exchanges for Regulators
for Reg BI
Vertical Packages
for Insurance
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DEMOINSIGHT INTO THE VISION
Questions?