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The cognitive level of surveillance for financial institutions

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Social Lead for IBM Analytics - Financial Services Sector, IBM

Since the financial crisis of 2008, financial institutions have increasingly sustained losses from trading scandals and have been investigated over allegations of a host of market abuses. A common thread among these rogue incidents is the use of electronic communications—email, instant messaging, audio and social media—as channels of collusion among employees. Advancements in communication and the adoption of high-speed electronic trading have increased the complexity of rogue activities, which are outpacing the silos of defenses used by many institutions.

The cognitive approach

Taking surveillance to the next level, IBM Surveillance Insight for Financial Services is a cognitive reasoning engine that goes much further than current surveillance approaches such as rules-based systems or lexicon-based systems that are used today. It provides online, real-time monitoring by leveraging real-time trading activity along with trader communications and social network activity to provide accurate and actionable insights and alerts. Real-time surveillance capability through its reasoning engine provides a unique visualization experience that identifies new patterns that haven't yet been considered.

In addition to real-time business activity monitoring, it uses advanced data mining, statistical models and sophisticated pattern mining to identify and act on potentially fraudulent activity. These patterns can be used to generate alerts that can identify potential acts of misconduct before it occurs and impacts the organization, market or customer.

Combining sophisticated pattern mining capabilities with insights from actual trader activity and communications, this holistic and dynamic surveillance system enables financial services organizations to build trader profiles, identify harmful behavior across legacy platforms previously in silos and reconstruct trade-floor events with greater efficiency. 

A holistic view

For more information on how cognitive capabilities can understand, reason, learn and adapt to volatility and changes in trader behavior, watch this webinar to hear industry experts discuss IBM Surveillance Insight for Financial Services. It provides a holistic approach that looks across the trading activity, specific actions and communications of the trader—and even how they recruit.