Data Capture, Automation and Surveillance in the Digital Age: A New Horizon for Financial Trading Compliance

A Risk and Compliance Benchmark Survey by WBR Insights

A paradigm shift is underway in financial risk and compliance – driven by a changing regulatory landscape, the use of new communication channels in trading, and emerging new technologies that are disrupting the market. Concerns about increasing compliance costs, resource constrains, and the expanded scrutiny by financial regulators, make companies look for new approaches to reduce compliance risk and avoid hefty fines.

In 2019, WBR Insights surveyed 100 Heads of Risk and Compliance from leading asset managers and investment firms from across Europe to find out more about the challenges they face and the trends they observe with regards to regulations, emerging new technologies, and regulatory technology (RegTech) investments for the years ahead. Let’s have a look at the results of the benchmarking survey report, Data Capture, Automation and Surveillance in the Digital Age: A New Horizon for Financial Trading Compliance.

Regulatory Technology | Compliance Recording | Data Capture | Communications Surveillance | Trade Surveillance | Compliance Automation | Compliance Assurance | Regulatory Reporting | Financial Risk Management | Cost of Compliance | AI & Robotics | Trade Compliance | Big Data Analysis | Data Intelligence in Finance | Speech Technology

of surveyed executives rated relevant or essential for their firms to use captured voice and electronic communications for trade reconstruction and verification.

of financial institutions stated to consider or have specific plans to invest in specialist Unified Communications and Collaboration recording.

of compliance executives cited the increased adoption of automation for compliance and operational assurance as the biggest future trend in the years ahead.

Some of the Key Findings

What do the benchmarking survey results tell us about the current challenges and approaches to communication recording, automation and surveillance for the financial community?

RegTech Spending On The Rise

The Risk and Compliance function is clearly taking a RegTech-driven approach as such investments continue to grow, despite existing concerns about securing sufficient budget to cover the escalating cost of compliance.

Emerging New Technologies

Financial firms are increasingly adopting new technologies to address regulatory scrutiny, automate processes and build data intelligence, such as AI, machine learning and robotics.

Data Collection & Aggregation

Companies are forced to strike a balance between regulatory compliance and data protection: the challenge is to securely store, consolidate, and produce high quality, relevant data for the regulator.

MiFID II & Regulatory Concerns

MiFID II remains one of the most pressing regulatory challenges for investment firms across Europe. Much of the transformation is still underway with increased compliance costs and stricter supervisory controls.

Implementing Holistic Controls

A high percentage of compliance executives find it challenging to perform ongoing controls, capture data from across channels, and enable effective surveillance procedures to reduce false positive alerts.

Mobile Messaging & eComms

New unified messaging and eComms platforms—offering voice, chat, video conferencing, and screen sharing—involved in trading increase risk exposure thus forcing firms to adopt recording and surveillance technology.

Compliance Surveillance

Capturing trade-related communications is only one side of the equation. Augmenting these records with transactional, market and CRM data can help businesses meet surveillance, trade reconstruction, and reporting demands.

Putting Automation to Work

Organizations are considering automation as the way forward to address resourcing challenges, reduce costs, mitigate operational risk, and enable assurance mechanisms to detect compliance threats and anomalies.