Panel Discusses Surveillance in Financial Firms

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How can a financial services firm utilize surveillance technology to monitor employees’ performances and increase its success? A panel of industry, regulatory, and legal experts addressed this question during “Sustainable Surveillance,” part of the Accenture Compliance Series, on Oct. 25.

According to Jacob Bukhsbaum, senior compliance officer of Global Infrastructure Partners, surveillance is defined as “what you do on a daily basis to check whether your employees are actually following the rules, the ranks, the policy, and the procedures that you’ve put in place.” Because surveillance helps detect bad and non-compliant behavior, along with identifying positive behavior and business-building insights, its use can enhance a firm’s reputation and profitability. Since criminals tend to learn surveillance mechanisms to avoid detection, it is important to modernize surveillance protocol.

In current surveillance systems, firms rely on very large swarms of data. Once collected, the various data are reduced into a normalized email structure, oftentimes without sufficient context. As a result, compliance officers often cannot successfully analyze the data.

“It’s kind of like a fire hose full of information, and you’re trying to apply a very narrow filter on that information to help bring down the false positives,” said Joshua Kay, compliance manager of Royal Bank of Canada.

In addition to Bukhsbaum and Kay, panelists included Matthew Epstein, compliance manager of Citadel LLC; Joseph W. Lodato, managing director, global head of compliance surveillance and technology at Guggenheim Partners LLC; and Jonathan Turnbull, senior manager, intelligence and analytics at HSBC. Lisa Bloomberg, principal director of regulatory and compliance at Accenture, moderated the panel.

The panelists discussed how firms are already beginning to take a more holistic approach to surveillance, using the data to optimize detection and prevention of misconduct. No longer abstracted, the data is attached intimately to people, allowing compliance officers to construct a behavioral profile for each employee.

“As surveillance evolves, which I think is the current and future state, it’s not just what somebody’s doing over an email. It’s not just what their portfolio activity looks like,” said Epstein. “It starts to incorporate all of their activity and hopefully starts to look for anomalies in their behavior that may indicate some type of wrongdoing.”

Looking to the future, the panel speculated on many advances modernized surveillance will bring. While AI may not emerge for some time, new technologies that will maximize company business efficiency will include automation, tools with which compliance officers may compile data, and an increase in jobs that require rigorous intellectual engagement.

“Moving from a data collection to actually getting to use your mind and spend more time on the investigation, that’s very much a future possibility,” said Turnbull.

The panel stressed how the financial work force will change dramatically, and compliance work will become much wider in its scope.

“As you go out into the future, there’s going to be a big mindset change,” said Lodato.

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