Banks Use Analytics to Detect Suspect Employee Behavior

by Sabrina I. Pacifici on October 10, 2013

Penny Crosman, BankThink/American Banker: “Ten large U.S. and European banks are using natural language processing technology from Digital Reasoning — one of Bank Technology News’ ‘Top Ten Tech Companies to Watch for 2012′ — to uncover such revealing documents before lawyers and examiners do. The company launched six Proactive Compliance analytics products six months ago. The software is meant to find emails that reflect unethical behavior and violations of Dodd-Frank, anti-money laundering, Know Your Customer and other rules. Some European banks use the software to analyze suspicious activity reports for signs of bribery. Other banks use it to find control room violations, to make sure their advisory services are clean, to keep insider information from leaking out of their organization, and to maintain the Chinese wall between trading and research. Banks’ current compliance solutions tend to focus on monitoring transactions and trade orders, Digital Reasoning executives say. But much valuable information is buried not in transactions, but in emails, instant messages, Word documents, PowerPoint presentations and other forms of “unstructured data” (which basically means, any data not stored in a database). Three large banks are using Proactive Compliance to catch employees who report that everything is fine but admit behind the scenes that disaster looms, in the manner of JPMorgan Chase’s London Whale.”

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