How 2020 changed the Trading Floor Surveillance

2020 brought some huge changes in how the world works. Literally, the working mechanisms that were most popular became outdated as soon, as the pandemic hit. Most of the employees had to shift to remote working, and the financial branch is no different from that.

As we can all imagine, the finances rely heavily on data protection, the security of it, and general confidentiality. When the bankers were in their offices, it was much easier for the employers to control their actions and make sure there are no leaks. That became an issue, that they still try to overcome because now everything requires new measures, unprecedented before, as more third-party entities have now access to their data. We have even come to the point, where talks are being held, whether traders’ co-habitants should disclose their details, as they theoretically have now access to their work station.

Growing awareness of frauds

But struggles with effective monitoring are nothing new. Even back in 2017, a survey was published by EY that showed a need for more reliable solutions, especially in trader surveillance.

To avoid market abuse, major efforts must be put into technology. We are talking about data validation, purging, protection of data, and audit tools. It is also important that those new solutions match regulators’ criteria. Not long ago we witnessed, how the loopholes in security could turn out.

In his piece, Andy Samu recalls, how in 2016 seven men were convicted in the United Kingdom after it has been discovered that $450 trillion in consumer loans and contracts have depended solely on the honesty of people who were agreeing on the rates. They did all of that from their Barclay’s workspaces in offices or trading floors. We can only ask ourselves, would things be different, had their employers have modern monitoring tools or not?

Readiness for lockdown in financial institutions

Despite the global pandemic and an urge to send employees to work from home, the FCA (Financial Conduct Authority) did not cease to encourage firms to do undertake every step possible to avoid market abuse.

After the first shock, we could clearly observe it in April, that their words were taken very seriously, as institutions relied heavily on compliance teams, that were supposed to be battling malpractices. Firms like EY even started to send their compliance teams members to banks all over the world in order to help with additional pressure which is a result of remote working.

Irish Deloitte has provided us in June with a report, that summarized remote working perfectly. You can read the most important paragraph of the report in Andy Samu’s original piece. He also dwelled on how different financial institutions approached controlling their workers during the pandemic, and we advise you strongly to check it out on the Disruption Banking page: https://disruptionbanking.com/2020/09/10/can-regtech-solve-the-technology-needs-of-the-post-covid-trading-floor/

The market’s response

Companies have almost immediately invested in the field of data and device protection, while others have made securities recommendations that would enable institutions to avoid frauds.

Christopher Wooten, the Executive Vice-President of NICE, claims that as the financial marketplace is a heavily regulated profession, it requires extra stability. To maintain it, FCASEC, and other firms have collected staggering amounts of data and with their technology are able to process it. NICE Actimize allows financial institutions to have access to it, but also to process it properly.

He of course pointed out, that keeping the security at the maximum rate was a difficult task in normal conditions, and it became even harder in the era of remote working. Because a lot of systems require onsite physical presence, they operate “dreadfully slowly” after they are accessed remotely via VPNs.

Most institutions were planning to make a trading floor surveillance step forward, but not yet in 2020. The pandemic has forced them to implement new solutions while they were not yet ready. The transition was planned to undergo in two or three years.

Wooten also reveals that during the COVID times, his company experienced an increased interest in adopting new security measures as well as expanding the surveillance. A shift to home offices has increased the need for safe communication systems and monitoring solutions, alarming the employers when something concerning happens.

For the full interview with NICE’s Christopher Wooten, visit the Disruption Banking article from Andy Samu, that we advised you to read before. Wooten’s statements shed a little more light on how modern banking surveillance may look and explains extensively the pandemic’s influence on that.

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