27 June 2023, London/New York: Demand for integrated trade and communications surveillance among financial institutions has surged by 100% this year following heightened regulatory scrutiny across the financial markets, research from SteelEye has revealed.
According to SteelEye’s 2023 Annual Compliance Health Check Report, which surveyed more than 300 senior financial services compliance and risk professionals, integrated surveillance is now a key investment area for over a quarter of financial firms (26%), compared to 13% in 2022.
Integrated surveillance refers to the ability to holistically combine, monitor, and analyze structured and unstructured data across trades, orders, communications, and contextual sources such as news and market data. Doing so can uncover risks that otherwise go unnoticed when trade and communications surveillance systems are siloed. It also enables firms to carry out trade reconstructions without missing the regulatory deadline – something financial firms globally continue to struggle with.
The increased demand for integrated surveillance comes amid a marked spike in regulatory scrutiny of market manipulation rules, specifically around communications and trade surveillance.
Over the past 18-24 months, regulators on both sides of the pond have increased their enforcement actions. In 2022, the Securities and Exchange Commission doled out a record $6.4 billion worth of penalties, while the UK's Financial Conduct Authority handed out almost triple the number of fines compared to 2021.
Intensified by the recent banking failures, regulators' patience for non-conformity is wearing thin globally. As layoffs and redundancies sweep the financial industry, compliance teams will continue to struggle if they do not adopt an integrated approach.
"Compliance departments of global financial institutions have never been under the level of pressure they are today," says Matt Smith, CEO of SteelEye."While regulatory rules haven't changed much in recent years, the expectations of regulators are higher than ever given how advanced technology in this space has become."
"To meet regulatory demand, financial firms need to get better at detecting potential market manipulation. However, they won't be able to do that if they continue to grapple with a proliferation of data, systems, and platforms. As stretched compliance teams confront a seemingly endless list of challenges, integrated surveillance will be critical in helping firms successfully navigate an increasingly complex and data-dependent regulatory environment."
SteelEye is the first and only fully integrated trade and communications surveillance solution. We empower financial firms with the data-driven tools and complete insights they need to focus on what matters, all from a single platform.
State-of-the-art algorithms and intelligent alerts proactively detect market manipulation and compliance breaches, while our holistic data model – which combines communications, trades, orders, news, and market data – provides intelligent insights and deep analytics. Founded in 2017, SteelEye has offices in the UK, North America, Portugal, and India.
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