Most financial institutions are already on the path to using artificial intelligence in markets surveillance. NICE Actimize’s David Ackerman explores how this shift will impact compliance and the new skills compliance officers will need to cultivate.
As those tasked with financial market compliance will tell you, the vast majority of modern-day surveillance methods are predicated on analyzing previous malicious behaviors. By understanding what actions, events and consequences took place leading up to a manipulative incident, people and technology are taught to look for similar patterns. The glaring fissure in this approach, however, is the fact that you often don’t know what you don’t know.
Since current surveillance methods usually require a previous event to learn from, firms can be exposed to untold amounts of risk from “innovative” corruption that is either new or makes use of clever workarounds to defy pattern recognition. Modern regulation has attempted to address this gap by requiring financial institutions to record mammoth amounts of data particularly on communications and trades. Yet despite the fact that more data is being recorded now than ever before, market abuses like insider trading, spoofing and ramping continue to occur. What is the solution to this…
