Evolving regulatory requirements are resulting in complex challenges for financial institutions around the globe. No longer just a ‘nice to have’ requirement, the ability to quickly and accurately reconstruct trade records, and proactively spot compliance breaches is now essential to several departments in the business, including risk, operations and trade.
Why can re-constructing trade communications be complicated?
Traders now use many new methods of communication; not just the traditional phone, but also mobile phones, email, instant messaging and social media to name a few.
As a consequence, firms have to ensure they are monitoring not just one, but multiple communication channels effectively.
This also means firms are forced to employ teams of individuals whose sole role is to manually listen to recordings of calls and try to piece back bit by bit the interactions from each channel in order to find that particular one requested by the regulator or due for an investigation.
This can be especially challenging and time consuming for transactions that take months to execute and involve numerous communications across multiple channels.
Let’s also not forget the stress of greater demands being placed to address regulator requests in shorter periods of time.
A proactive approach to trading compliance
The tasks required for trade reconstruction are repetitive and tedious. As well as this, keeping on top of any emerging risks and compliance breaches is another job altogether.
As part of a proactive approach to managing risk smarter and more efficiently, solutions now offer an intelligent investigation function that reduces time and manual errors in searching. This search tool is able to offer a single interface to review calls, emails, SMS, chats and social media feeds.
This particular search tool is made even more powerful by its ability to actually search for conversations in context to what was discussed.
Searchable ‘by trade’
The ability to re-construct trade communications is also made simpler by making them searchable ‘by trade’. These interactions are graphically shown synchronized in time, with relevant parts such as certain indicators a compliance breach may have occurred, highlighted.
By spending less time on the mechanics of a trade reconstruction, an analyst can devote more time to carefully reviewing the results, before handing them over to the regulator.
Trade reconstruction technology benefits the regulator too.
Instead of receiving separate files, the technology simplifies their job too, allowing them to visualise communications on a timeline as they happened, providing context behind these communications.
As the pace of regulatory change accelerates, financial firms need to get better and faster at trade construction.