Retaining all regulated communications is only one side of the compliance equation. Regulators increasingly demand financial institutions and investment firms to have their records readily available as long as required by law. Compliance teams need to facilitate timely and accurate response to audit and compliance requests to reduce risk for their business.
This literally means being able to identify, reconstruct and provide the chain of interactions related to a specific transaction that may have occurred 5 years ago. Under MiFID II, for instance, the scope of interactions is broadened with those voice and electronic communications that might have led to a trade. It's no surprise that this places severe strain on the capabilities of the compliance solutions in use in many businesses.
This leads to another critical area in the heavily regulated world of financial services and trading. Knowing what was being said — and by whom — is critical for ensuring compliance. But relying on random sampling, incomplete voice records and unreliable transcripts to detect potential issues can be time-consuming and risky.
The latest AI technology enables businesses to aggregate and make sense of a vast amount of alternative and unstructured data — such as voice streams, transcripts, chat logs and other recorded media — to accurately reconstruct the sequence of trade-related conversations, and surface non-compliant activities. On top of that, extracting accurate voice data from noisy financial services and trading environments in an automated and efficient way is cumbersome and often requires specialist knowledge.
Discovering what was said by before, during or after a trade–either by a broker-dealer on the trading floor, by an equity trader via mobile or by a supporting back-office employee–is vital if the regulator comes knocking. You may have to reconstruct a complete transaction history buried in a large volume of interactions filled with trading and financial jargon. It’s no easy task to decode, especially when traders use multiple active lines via trading turrets to continuously exchange information with colleagues, counterparties and clients.
Not being able to find and extract the data you need from recorded voice conversations can put your trading compliance at serious risk. What’s more, it makes it cumbersome to spot signs of insider trading, market abuse, anti-money laundering and other unethical activities your business should be aware of.