As some may find it more convenient to work from home during the pandemic lockdown, it has become clear for the employers, how important is the safety of confidential information processed by their employees. Andy Samu’s article published on the Disruption Banking website really puts a lot of emphasis on how the broker businesses will now have to deal with new challenges.
In the banking field, confidentiality is one of the critical factors leading to success. To provide it, the companies usually oblige their employees to adhere to strict rigors regarding the provision of information. But now, they are faced with the necessity to work remotely. Does that make the families and co-habitants of the employees eligible for non-disclosure agreements?
Therefore, there is a need to increase the precautionary measures applied to bankers, as well as those applied by them, to operate in the safest workspace possible. This is not a common practice, as, for instance, the Bank of Japan has issued a statement in August, rejecting the possibility for traders to work from home.
However, in other parts of the world, the term “Authorised Home Access” gains popularity, as indicated by Andy Samu. United States, European Union, and the United Kingdom are facing a great challenge of providing sustainable control over bankers’ actions.
Avoiding market abuse with the use of surveillance of the trading floor
As the surveys show, the firms are struggling with providing effective monitoring, also in the field of trading surveillance. Abusing the market has been a huge concern for years now, and in the Disruption Banking piece, we can find a solution to that – technological development. The ongoing evolution of data validation tools, audits, and data purging will, when developed, provide this sustainability and safety on a new level.
The author of the article gives an example of a publicized case of seven men who were convicted in the United Kingdom after 450 trillion dollars worth of contracts and consumer loans were proved to be dependent on the honesty and agreements between them.
COVID-19 seems to be the pivotal point to that development, as it sped up the improvement of technology. A new environment, where traders and the whole world are encouraged to work from home, has forced firms to put more emphasis on safety and surveillance. SEC’s Office of Compliance Inspections and Examinations gave out a risk alert regarding this topic. Below you will find its bullet points:
– Less control over supervised people;
– Recommendations of market sectors that are volatile and at increased risk for fraud;
– Limited reviews of managers, investments and portfolio holding companies;
– Communications or transactions being conducted outside of systems provided by the firms.
Response to the need for more trustworthy Trading Floor Surveillance
There are entities that have already invested large amounts in order to adapt to the new environment. New recommendations and suggestions are regularly submitted, and Andy Samu in his piece quotes Christopher Wooten, Executive Vice-President of NICE, who states how the introduction of new technologies will “help firms manage and understand where conducts risks exist”.
For an extended, comprehensive statement, visit Disruption Banking’s text: https://disruptionbanking.com/2020/09/10/can-regtech-solve-the-technology-needs-of-the-post-covid-trading-floor/