In response to what it views as a fragmented regulatory ecosystem, ACA Compliance has launched a new compliance and risk management platform aimed at assisting firms to automate their processes, connect their data sources and scale up their compliance strategy.
ComplianceAlpha 2.0 is a new trade surveillance approach targeting employee compliance – helping firms to stay one step ahead of regulators’ increasingly advanced capabilities to detect insider trading, market abuse and other potential misconduct.
The platform monitors and detects activities for market manipulation, fraud, and behavioural patterning. At its core, it provides a harmonised view of compliance across the enterprise, identifying weaknesses in the firm’s approach in order to reduce risk of censure, and automating the identification of potential items of interest that may require further attention. For example, in the sensitive area of gift-giving, employees can submit disclosures and attestations for gifts and entertainment for approval by the compliance team – through an API-based infrastructure that allows the platform to integrate with expense management systems in order to optimise and automate the oversight, workflows and surveillance of gifts and entertainment monitoring.
“As a firm focused on all financial services regulatory matters, coupled with our breadth of consulting services provided by almost 100 ex-regulators, there is a core focus on a proactive (prevention) approach vs. a reactive periodic (detection) approach, which aligns with the regulators’ approach and industry best practices,” Managing Director Patrick Conroy tells RTI.
“Our Trade Surveillance solution aims to detect anomalous trading behaviours and produce exceptions that have a high degree of precision. The main objective is to isolate the needles in the haystack, and therefore raise the effectiveness and efficiency of the compliance professional performing the surveillance oversight. Most workflows still involve a manual review of trade blotters by humans in a siloed fashion, not taking into account a lot of other structured and unstructured data inputs and factors. By aligning our regulatory expertise with the computing power of our Trade Surveillance solution, we are able to produce a more refined workflow that allows practitioners to realize greater efficiencies and dedicate more time to focusing on top priority issues resulting in a greater ROI for our clients.”
The solution works by ingesting data from a variety of sources that is then compiled, enriched with market data, and screened across a set of algorithms designed to detect specific types of patterns associated with certain potential manipulative or insider trading activity. The exception results produced by the algorithms are deemed items of interest to indicate they are a manifestation or anomaly of the aforementioned patterns.
“To accurately and efficiently meet regulatory demands and identify risk, financial services firms no longer have to rely on manual processes and unconnected data sources,” says Partner Jordan Schwartz. “Firms need the support of an enterprise-wide, scalable technology solution that brings together their structured and unstructured data sets while allowing for easy feature updates as needs change.”
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