Surveillance is high on the agenda for most financial services’ compliance teams. Despite extensive work done in this space, many firms still find their surveillance processes insufficient compared to the expectations of regulators. Earlier this year, the UK’s Financial Conduct Authority (FCA) issued a statement that it remains concerned that requirements for market abuse surveillance are not being fully met, despite the Market Abuse Regulation (MAR) having been introduced as far back as 2016.
Indeed, UK, US and Canadian regulators, amongst others, are themselves focused on investing in advanced technologies, such as AI, to detect – and prosecute – firms participating in market manipulative behaviours. For instance, the Monetary Authority of Singapore (MAS) is using predictive modelling to identify individual financial advisors that have a higher likelihood of being involved in market misconduct.
Mirroring regulators, compliance professionals across the globe are reviewing their legacy surveillance systems and looking to implement ‘next generation’ surveillance solutions. A 2021 survey conducted by GreySpark Partners of key compliance personnel in 18 capital markets firms operating across EMEA, the US and APAC indicated that as many as 70% were looking to future-proof their surveillance solutions with advanced analytics such as AI.
The majority of ‘next generation’ surveillance solutions available today use AI techniques to process, manage and analyse the large, complex and diverse volumes of data that compliance teams need to monitor. As firms begin to embrace AI in pockets across their organisations, many people may still have questions about what the application of AI technology means in practice. This report by GreySpark Partners, in association with Relativity, presents an explanation of artificial intelligence and describes why it is a particularly useful set of technologies to apply to the communications surveillance use case.