The recently launched 2024 Surveillance Benchmarking Survey & Report from 1LoD and co-sponsored by MCO (MyComplianceOffice), sheds light on the evolving landscape of surveillance across financial institutions. The insights, gathered from over 30 prominent banks globally, highlight significant developments in the ways these institutions approach compliance and surveillance.
The report, which can be downloaded here, reveals an increasing influence of regulators on the operational and technological strategies of surveillance teams. This regulatory scrutiny is not only shaping the size and structure of these teams but also influencing their technological investments and focal areas. Notably, the aftermath of substantial fines, like the recent $350m penalty for JPMorgan Chase & Co, has seen a surge in spending, particularly on e-comms technologies to comply with regulatory standards. However, once remediation phases conclude, there tends to be a reduction in spend, potentially leading to gaps in compliance as technology and regulations continue to evolve.
MCO Director of Solution Sales, Keith Pyke said, ” surveillance and retention is just one part of an effective compliance program. Better compliance moves beyond point solutions that surveil communication activities in silos and towards an integrated platform approach that also includes other areas of potential risk including employee trading activities, MNPI and automated watch list monitoring.”
This year’s survey also casts a spotlight on mid-tier banks, which are now facing increased regulatory attention. These institutions can no longer afford minimalist surveillance strategies, as even smaller banks have been found to significantly influence specific assets or markets. This has led to a broader scope of surveillance to include a variety of communication channels and trading activities, ensuring a more comprehensive compliance framework.
Furthermore, technology is set to revolutionise the surveillance space. The integration of AI and machine learning technologies is expected to overcome longstanding challenges such as the elimination of false positives in trade surveillance. This shift not only promises enhanced efficiency but also necessitates an overhaul of outdated data management practices, posing a strategic decision for banks between high-tech, low-people, and low-tech, high-people models.
The findings from the report underscore the importance of an integrated approach to compliance surveillance. As technologies and regulatory frameworks evolve, financial institutions must ensure they are not only reacting to changes but are also proactively adopting strategies that ensure comprehensive coverage and adherence to regulatory expectations.
To see the full findings of the survey, read the 2024 Surveillance Benchmarking Survey & Report here.
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