THE FUTURE OF TRADE SURVEILLANCE
R&C: Reflecting on the last 12 months or so, what do you consider to be among the significant trends and developments to have impacted financial trading?
Fagone: The mass-dislocation of the workforce we experienced in 2020 was a significant challenge, from both a surveillance and supervision perspective. Supervisory processes designed to work on the trading floor had to accommodate a displaced workforce and surveillance tools had to be extended to accommodate the realities of working from home. First- and second-line supervision and compliance professionals had to define new procedures to account for the lost line of sight into traders’ activities. In addition, global regulators signalled to firms that their surveillance platform, including voice and chat surveillance, had to be comparable for traders working both in the office and from home to avoid potential arbitrage. This has significantly impacted the way firms approach and think about surveillance. Specifically, firms had to address impacts associated with capturing communications across disparate communication channels, achieving line of sight from a supervisory perspective into the activities of a remote workforce, reallocating compliance assets to deal with the unexpected backlog of volume and volatility driven surveillance alerts, and recalibrating surveillance logic, tunings and thresholds to deal with that volume.
Jul-Sep 2021 Issue
KPMG