Real-Time Trade Surveillance At Hand

Terry Flanagan

The ability of traders to communicate on a single topic through various media such as voice, chat, e-mail and social media is causing headaches for regulatory compliance personnel, who are tasked with monitoring for suspicious activity.

“There has been a big push by regulators to manage elements of surveillance in a different manner,” said Cromwell Fraser, director of trading floor portfolio and business development NICE Systems’ financial markets compliance business. “Communications surveillance has been around for things like chat and e-mail for many years, albeit in a fairly rudimentary way. What regulators are looking for is greater sophistication.”

Capital markets firms now require near real-time surveillance in all forms of communications, including voice. This precludes having individual teams look at individual technology silos. “Especially as traders are communicating a single communication thread through lots of different media, you want to offer a capability to that in a single, seamless way,” said Fraser.

The next level of surveillance in the trading floor is what Fraser terms “holistic surveillance,” or a blending of trade-alert and communications surveillance.

“Conceptually, we think it’s meaningful that one can get a trade alert, and subsequently get an alert from a communication standpoint that there may be something that needs to be reviewed,” he said. “What we are doing with holistic surveillance bringing the two together, so that if I get a trade alert, I can also look at all the relevant communications around that transaction. We are providing our customers with everything that’s relevant to a trade in one place.”

NICE Systems provides financial institutions with a Trading Recording product that documents all access to call recordings and delivers instant call retrieval and replay to the workstation. The company is adapting Trading Recording to support the diverse forms of communications that customers need to capture, such as front-end, back office and mobile phones.

“The days of one line for one recording element are over,” Fraser said. “People can now be very dynamic in the way they communicate, so we need to be able to record in that fashion as well.”

NICE Trading Recording is certified to support Microsoft Lync, Microsoft’s next-generation unified communications software. The qualification ensures that financial institutions can now use the same reliable, secure and scalable recording platform used in their trading floors for the back office, the companies said in a release.

“A Lync user can use a telephone, use a chat client on their PC, they can use a mobile client, and can interlink between them,” said Fraser. “We have certified with Microsoft to provide a voice recording solution that will capture that and pump that information into our communications surveillance solution.”

Featured image via Tomasz Zajda/Dollar Photo Club

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