COVID-19 Drives Increase in Compliance Budgets

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SteelEye, the provider of compliance technology and data analytics, recently hosted an online panel on Market Abuse Monitoring, during which they polled delegates from the buy- and sell-side.

  • 40% of those who took part in the poll said that their compliance departments have been given increased budgets to manage problem areas since the lockdown. Not only is this a clear sign of the challenges presented by remote working at this scale, but it demonstrates a speedy response by firms, who quickly realised that a clear focus on compliance and oversight remains essential.
  • Respondents also said that monitoring communications is the most significant challenge they are facing in lockdown, and this has been the focus of the budget increase. Mobile communication and voice surveillance combined are the biggest concerns, understandable when you consider that employees are working at home, possibly using personal devices and are not always connected to firmwide monitoring tools.
  • Key to monitoring communications, is the ability to overlay multiple forms of communication together for better analysis, and 50% of respondents highlighted this as the area where they are struggling.
  • Another concern (with 46% highlighting this) is reactive rather than proactive alerts, which reduce the effectiveness and timeliness of compliance teams being able to review and respond to potential breeches.
  • Resolving these challenges means that 59% of respondents see automation as their top priority from a surveillance perspective. Creating customised, automated searches with smart algorithms generates specific, timely alerts that help to identify and resolve risks quickly. Apply machine learning or artificial intelligence to this, and surveillance systems are able to improve the accuracy of alerts over time, based on the ones previously rejected or accepted.
  • For compliance managers overseeing a dispersed workforce, this level of automation is naturally an appealing way to ensure compliance and effectively monitor trading operations.
  • Consolidation and normalisation of data continues to be a key focus, with 48% highlighting this as a top surveillance priority. This is an ongoing requirement that supports clients when meeting regulatory requirements and has the added advantage of driving enhanced performance insight for businesses through indexed, searchable and instantly retrievable data.

 

Under current remorte working conditions Market Abuse challenges have been magnified due to firms finding it increasingly difficult to capture the data required for surveillance, including trades, orders, voice calls, instant messages, WhatsApp, SMS and even CRM data and meeting minutes. 

More information is available from SteelEye.

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