How Communication Surveillance Arms Financial Crime Teams Against Misconduct

We all remember the kid in class who was only on their best behaviour when the teacher was around, right? Like that teacher, compliance teams at financial organizations must be aware of the risk for bad behaviour when their backs are turned—and establish surveillance policies accordingly.

Now, we’re not comparing employees to school children—even if we did, we’d all agree they are more like the ones who are consistently well-behaved. But stakes are high, as are regulator expectations, so when it comes to financial crime, compliance teams don’t have the luxury of assuming everything is operating as it should.

Financial institutions should not only be prepared to look through a reactive lens at potential misconduct, but also utilizing a proactive safeguard to prevent it from escalating. Financial crime teams often function in response to an event, kicking off post-transaction investigations when much of the critical context and intent is in the communication that happened before a transaction was made. That’s where communication surveillance comes in.  

What Does Communication Surveillance Have to Do with Financial Crime?

Financial crime teams are established to identify and stop the illicit flow of money and have traditionally worked by reviewing communications after a breach has been flagged. The communications are used to identify intent and build a story: what happened before or after a trade; what has this customer told our employee; was an order pre-agreed on to benefit a trader; was there a legitimate business purpose for a payment? 

Historically this type of investigation has utilized technology including “know your client” controls (KYC), customer due diligence (CDD), transaction monitoring for manipulations, relationship monitoring for bribery and corruption, and post-transaction investigation. The investigations were limited to after-the-fact because it was seen as the only feasible way to understand the situation. However, by leveraging communication surveillance beforehand, these crimes could have potentially been stopped.

Corruption and code of conduct violations don’t happen in a vacuum; there is almost always a plan that comes together beforehand, and it may be documented by internal communications platforms. The UK’s major economic crimes investigative agency has taken steps to emphasize the need for companies to invest in programs and procedures designed to prevent wrongdoing, its director said recently.

This policy shows in practice, too: In a ruling on two companies facing similar charges, Serco Group PLC and G4S PLC, Serco Group was given a more lenient fine because of their ability to show that they had invested in embedding compliance monitoring in their best practices.

Bolstering the Financial Crimes Team’s Arsenal

By fostering a strategic partnership between communication surveillance and financial crime teams, you can ensure that you have the full picture of activities taking place in your organization. The diverse ways we communicate—from email to Slack, voice to Zoom—present even more challenges to tracking how corruption begins and takes place. After all, beyond simply capturing the content of each conversation, understanding context and follow-through is just as vital when examining in-scope communications.

The task may seem insurmountable, but rest assured that it needn’t be so intimidating. By incorporating automated communication surveillance technologies into your financial crime controls, your firm will be better equipped to detect breaches before a crime takes place.

Most firms deploy communication surveillance tools to combat market abuse and detect  misconduct, but struggle with getting precise, quality data—often resulting in a flood of duplicate and irrelevant files to review. The key is to gain new insights without increasing the workloads of financial crime teams. To that end, leveraging artificial intelligence to flag only the riskiest content will make human effort more targeted and efficient.

Developed based on a wealth of experience using advanced de-duplication software and machine learning in the e-discovery space, Relativity Trace pinpoints the riskiest content in a data set related to what your needs are—which is the only way that surveillance can work successfully. To simplify the investigation process, communications can be aggregated side by side with transaction alerts—automatically connecting related communications with transactions. Once you can see the correlation between conversations and behaviour, the wrongdoing can potentially be stopped before it occurs.

Partnering with Surveillance Teams

Communication surveillance strengthens your investigation strategy by helping financial crimes teams utilize technology that they likely already have at their disposal. The data is already there; aggregating and analyzing it is the next step. That’s where Trace can help.

Your employees are rapidly moving across platforms—from email to Skype and back again, using different languages and lingos, and it’s important to have a surveillance system that can collect and understand all of the data to help you paint the whole picture.

Surveillance is a well-known priority in financial institutions. The next step is finding ways that financial crimes teams can leverage the data that is already at their fingertips. With the use of prebuilt models, your financial crime team can not only detect for potential breaches, but also detect for the intent. Software that can dive deeper into communications between your employees is the best way to safeguard against risk and remain compliant with internal and external regulations.

From large corruption charges to internal breaches of conduct, communication surveillance can paint a real-time picture of the ways your employees are sharing information.

Sonia Chowdhury is a compliance subject matter expert at Relativity, where she supports development of Trace—a communication surveillance tool that detects insider trading, collusion, and other non-compliant behavior in real-time.

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