Comments
The Risks of Communication on Wall Street
Newest First  |  Oldest First  |  Threaded View
Becca L
50%
50%
Becca L,
User Rank: Author
5/31/2014 | 7:16:52 PM
Re: Predictive Analytics
Ivy, voice analytics is becoming a really interesting element in compliance!

I've written on it before here: http://www.wallstreetandtech.com/risk-management/learning-from-past-mistakes-with-predictive-analytics/d/d-id/1268593? and http://www.wallstreetandtech.com/compliance/heres-why-tracking-voice-patterns-can-improve-compliance/d/d-id/1268463?

"We've plotted the historical data against Enron, and you can see the emotional trending peak and troughs. When you look at certain events you can see the actual peaks are where these instances [of stress and fraud] are happening. It's fair to say it's another piece of evidence a corporation should look at in an evaluation." - Mark Whiteman co-founder of Citicom Solutions
IvySchmerken
50%
50%
IvySchmerken,
User Rank: Author
5/30/2014 | 8:10:13 PM
Predictive Analytics
Becca, I didn't think of the potential for voice analysis. You are hitting on something that didn't occur to me at all. If firms used software/predictive analytics to detect changes in tone, mood and fatigue, it could point to a trader on the verge of a bad decision or a risky move. Although this could be like going to a fortune teller.
Becca L
50%
50%
Becca L,
User Rank: Author
5/30/2014 | 2:17:27 PM
Re: Staying ahead of the regulators
Interesting theory, Jon, and it doesn't sound all that far-fetched. NSA can use the financial services as test dummies to see what levels of communication can be recorded and to what degree of success they have in detecting illicit behaviors. Transfering that knowledge to the public... powerful and interesting...
Becca L
50%
50%
Becca L,
User Rank: Author
5/30/2014 | 2:12:43 PM
Re: Staying ahead of the regulators
Ivy, exactly my thought! I hear a lot about this, using predictive analytics on communication to identify patterns/trends that might lead to not only non-compliance, but poor trading decisions. They can even detect tones, arguments, fatigue.
IvySchmerken
50%
50%
IvySchmerken,
User Rank: Author
5/29/2014 | 11:21:43 PM
Re: Staying ahead of the regulators
While financial firms are required to monitor all communications, and compliance can be costly, this sounds a bit like big data analytics. Once firms are monitoring their voice recordings for key words to prevent insider trading, they also could pick up insights into which products are generating alpha or some other valuable piece of information that could lead to a business opportunity.
Jonathan_Camhi
100%
0%
Jonathan_Camhi,
User Rank: Author
5/29/2014 | 6:06:46 PM
Re: Staying ahead of the regulators
This feels like one of those (many) cases where financial services is a sort of test-dummy for regulation that I could see spreading to many other industries. With all of the focus now on privacy, especially after the NSA spying programs were revealed, I think this is an area where consumer advocates would push for regulation in many different industries. Financial services is just getting a taste of what others will likely have to deal with in the next few years.
Greg MacSweeney
50%
50%
Greg MacSweeney,
User Rank: Author
5/29/2014 | 1:44:59 PM
Staying ahead of the regulators
Financial firms need to be able to monitor and analyze all types of communication across communication channels, so compliance can pick up on signals that may indicate trading violations. It is not easily done, but this is what regulators expect -- compliance integration across ALL media (social, IM, email, voice).


Register for Wall Street & Technology Newsletters
White Papers
Current Issue
Wall Street & Technology - Elite 8, October 2014
The in-depth profiles of this year's Elite 8 honorees focus on leadership, talent recruitment, big data, analytics, mobile, and more.
Video
Exclusive: Inside the GETCO Execution Services Trading Floor
Exclusive: Inside the GETCO Execution Services Trading Floor
Advanced Trading takes you on an exclusive tour of the New York trading floor of GETCO Execution Services, the solutions arm of GETCO.