Ninety-five million Americans invest seven trillion dollars in mutual funds. For many of those 95 million, plus countless financial advisors, investors, traders and administrators, the mutual fund industry is now synonymous with the seemingly endless barrage of scandals that have rocked the industry's foundation.
Daily coverage in the world's major media outlets has introduced an entire new audience to terms such as breakpoints, late trading, market timing and self dealing.
As a result, the mutual fund industry stands poised on a precipice. New and pending changes from the SEC, NASD and other governing bodies are changing the face of the mutual fund industry.
Amid all the bad news on Wall Street wrongdoing, there is good news for financial services companies and compliance staff: A new generation of technology, called "behavior detection," means that more and more financial abuses and violations will be detected in the early stages rather than long after they have severely damaged a company and its customers.
By utilizing the Mantas Behavior Detection Platform™ and solutions like the Mantas Mutual Fund Compliance Solution™, financial institutions stand to repair and preserve market reputation, gain critical insight into internal costs and exposures, and to adapt quickly to the changing regulatory environment.
Based on the Mantas Behavior Detection Platform, The Mantas Mutual Fund Compliance Solution uses sophisticated pattern recognition techniques to monitor trading practices, flows of funds, client behavior, high risk clients and sales charges related to fund management practices and client activity. It alerts analysts and management of found behaviors, providing a context of business data and historical information with which to streamline analysis and resolution.
Unlike other vendors' offerings, the Mantas Mutual Fund Compliance solution can be expanded easily to reflect changing regulatory requirements and areas of focus in a fund management firm. Through the use of the Mantas Behavior Detection Platform, clients can increase their protection by selecting additional "scenarios" for use.
More Than Reporting
With the heightened awareness on mutual funds and compliance requirements, the market has seen a flurry of technology vendors espousing the benefits and virtues of their particular product. Many of the technology vendors vying for the mutual fund market are providers of rudimentary reporting tools that do little to provide an organization with an understanding of how it operates and is at risk. Fewer still, are the technology vendors that have proven expertise in the financial markets, which is critical to bridging the gap between data analysis and business risk.
The Mantas Mutual Fund Compliance Solution provides greater breadth of coverage - both in mutual fund compliance, and across multiple compliance requirements including Employee trading monitoring, client/intermediary trading violations (such as market timing and late trades), and money laundering - than any other solution vendor.
Most reporting tools also lack the ability to store or maintain a record of data and alerts that are required when undergoing a compliance audit. The Mantas Mutual Fund Compliance Solution, like all of the Mantas offerings, features a superior workflow and audit trail capability. This replaces manual processes and incomplete audit trails, and provides a comprehensive examination of workflow alerts, details, historical snapshots and actions. In addition, the Mantas solutions offer an integrated case management and online reporting capability.
Uncovering Mutual Fund Abuses
The Mantas Mutual Fund Compliance Solution can identify multiple scenarios of illegal or improper mutual fund activities. These activities of interest, known as "scenarios" are targeted at helping institutions identify and eliminate late trading, market timing, self-dealing and breakpoint violations.
How Does Behavior Detection Technology work?
Behavior detection technology untangles the webs of complex behavior that lie behind such problems as sales practice abuses, money laundering, and trading abuses. It allows companies to detect wrongdoing by finding suspicious patterns of behavior buried and hidden within voluminous data.