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