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Firms Turning to Voice Transcription to Address Regulatory Scrutiny

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Demand for voice transcription services from surveillance professionals at financial institutions is at record highs, according to analysis from compliance data and technology specialist SteelEye. Firms are seeking voice-to-text solutions for calls on fixed-line, mobile, MS Teams, Zoom, WhatsApp, and other communications mechanisms as part of to their surveillance programmes.

SteelEye analyzed all Requests for Information (RFIs) for communications surveillance it had received over a 12-month period and found that in 100% of cases, firms listed voice transcription as a key requirement. The company attributed this hight demand to more flexible post-Covid working practices and greater regulatory scrutiny, which are prompting firms to seek faster and more accurate transcription services.

In the UK, the FCA has repeatedly reinforced the need for financial firms to record and monitor relevant telephone and electronic communications, noting that working from home (WFH) can lead to an increased risk of misconduct. SteelEye also reports increased scrutiny of firms that fall short of oversight rules in the US, even though it is not yet a requirement to capture and store voice communications. In December, SteelEye notes, the SEC and CTFC handed out a $200 million fine to JP Morgan for failures related to employee communications monitoring. Since then, the SEC has also opened an investigation into Citi Group, Goldman Sacs, and Morgan Stanley over employee communications, the company says.

The demand for better and more automated transcription of voice data can be seen as a move from the industry to get ahead of regulators by enhancing their communications surveillance programmes. Transcribing and indexing voice communications can enable firms to better analyze their data to identify risks and signs of wrongdoing. Yet most incumbent voice transcription services are slow with poor accuracy, making the speech-to-text process lengthy and the output often unreliable, impacting the analytics that can be derived.

According to Matt Storey, Chief Product Officer at SteelEye, “One of our clients explained that it used to take them over 24 hours to process the voice communications that occur within their firm each day. Where data volumes increase, so does the processing time which is where the problem arises for large firms who end up racking up large transcription costs with limited upside. Running searches using inaccurate transcription data is ineffective and leaves firms vulnerable to missing key signs of risk.”

To address the transcription technology gap and enable faster and more accurate voice analytics within financial services, SteelEye has released an industry-specific transcription engine. SteelEye says its transcription engine is 120 times faster with 90%+ accuracy, powered by DeepGram, whose speech recognition model is AI-driven to yield enhanced results.

“The demand for better technology in communications surveillance is only set to increase. Financial services firms tend to follow the herd when it comes to innovation. We are already seeing tier one firms investing in advanced and real-time transcription as a priority. If regulators start to expect the digitalization of voice as a norm, the ‘herd’ will follow,” says Brian Lynch, President of SteelEye Americas.

SteelEye’s transcription model is tailored to the financial markets with linguistic customization that accounts for industry jargon and the specific language used to manipulate markets, amassed from hundreds of court filings covering market abuse offenses. With better voice-to-text accuracy, surveillance models can become more intelligent, allowing firms to better identify compliance risks while reducing false positives.

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