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THE EVOLUTION OF TRADE SURVEILLANCE

Helen Bevis, SteelEye

 

There has been many regulation changes to hit financial institutions since 2008, so we poised the question to Helen Bevis, Business Relationship Manager at award winning compliance solution provider, SteelEye. What does the evolution of trade surveillance look like today?

 

What are the key drivers behind the adoption of a trade surveillance system?

There is a clear legal and regulatory drive for financial firms to implement trade surveillance systems to ensure they comply with regulations, but also to reduce the risk of fraudulent malpractice & protect their reputation. The introduction of The Markets Abuse Regulation (MAR) has significantly raised the bar for compliance and surveillance systems to not only deliver rule based detection, but ensure compliance officers have a personal liability to continually evaluate their company’s trading activity.

 

by Helen Bevis, SteelEye

To achieve comprehensive surveillance coverage, firms now need a solution that can bring together disparate systems, so that all data can be evaluated in a centralised repository, allowing  analysis  to be run across multiple asset classes and products, going above and beyond the “tick in the box” solution. MAR came into force in July 2016, and we are still seeing firms install their first deployments of an automated system. This could be due to the increase in physical fines being handed out, or that technology advancements have made compliance systems more attainable and more practical.

 

How do you manage the challenges of tracking and storing multi-channel communications (Chat, text, voice, Email)?

Correlating trade alerts with communications (voice & e-comms) prevents analysts from chasing down false positives and enables them to detect the underlying intent for malpractice. It’s better to start with multiple pieces of evidence which can be stitched together than just one rule based alert. Extending your analysis to include trade reconstruction produces an entire auditable trail of evidence which can be reviewed together. Having the ability to construct these types of multiple events in a matter of minutes, firms can utilise it every day giving them the ability to generate useful insights and performance guidance.

 

For any of this to be possible you require a platform that can easily ingest, index and make searchable all communications data across all devices using a tried and tested data on boarding method. Additionally utilising a level of machine learning helps to accelerate the results and fine tune to your business needs.  SteelEye is able to reduce all these frequent challenges using a common framework across its analytics, database and case manager, reducing the physical work flow, resources and cost.  

 

What is an effective consolidation of data and how smart can you be with the data?

All compliance officers are looking for a magic spotlight to highlight where the suspicious activity is in their business. Having the data all in one place is the first step, but having the right analytics to make use of this data repository is essential. Every business is different and therefore no “one size fits all” out of the box rule, which would adequately cover what the regulations demand. Each installation requires an easy to use, but flexible tuning mechanism, so users are able to customise rules and thresholds to suit the firms trading activity. SteelEye also provides its users the “Hindsight” ability to back test scenarios and review the results before being processed into production. Giving compliance officers the powerful insight to know what their results would have looked like if the conditions were different, allowing users to understand change, and how to forecast results.

 

What is the role of Artificial Intelligence (AI) & Machine Learning (ML) in helping deliver better solutions?

AI and ML are common practice in financial technology these days… but it’s how they are being used that people are confused about. In trade surveillance the technology has come to the forefront showing us how we can learn from the patterns in our data. If we can establish what is normal then we can focus and learn from where there are deviations. Understanding the behaviour of individuals can reveal not only conduct risk and exposure to dependencies, but also forecast areas of concern, which can then be fed back into the analytics. Overlaying multiple different sources of data and bringing them together will ultimately build a solid foundation of investigation.

 

There is still much evaluation to be derived from the evolution of technology, but having a state of the art core platform which can be built and adapted to these new trends, is the key to unlocking its potential and benefiting from it as it starts to grow.

 

 

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Interviews

A PROPTECH FOUNDER’S BEGINNING, THE START OF KLEVIO AND HOW ACCESS-TECH IMPROVES FACILITIES MANAGEMENT

KLEVIO

An interview with Klevio’s CEO and Co-Founder, Aleš Špetič 

 

What is Klevio? 

Klevio is a smart intercom that allows individuals to enter a building using a mobile app, providing digital access and removing the need to use a key. Teams or individuals can manage access rights from our dashboard or the app, understanding the usage of their buildings better, whilst cutting costs and improving efficiencies. As well as Facilities Management (FM) professionals, Klevio’s technology has been implemented across numerous sectors including short-stay lets and longer-term property management, a recording studio that manages room bookings and a London pub which allows temporary access to delivery professionals via its solution. Klevio is also popular with private homeowners.

 

How did the idea come about? 

The founding of the team and the products we worked on came from several influences along our journey. I was still working on CubeSensors, a company I founded that created miniature sensors for both the home and offices, feeding back data on temperatures, noise, light, humidity and the likes, something of a Fitbit for the room.

Aleš Špetič

My co-founder and now Chairman, Demetrios Zoppos, was involved in the creation of Sherlock, the digital entry system that went on to be the underpinning technology for Klevio. When Demetrios exited his previous company, onefinestay, he held onto the intellectual property (IP) of Sherlock, knowing that there was a future for this technology elsewhere.

We quickly came to the conclusion that my IoT experience and history with physical products for consumers and offices, and the IP he had kept for Sherlock, meant that it would be criminal not to pool our experiences and so Klevio was founded.

 

How do you compete with the other access solutions on the market? 

We have merged the new and the old. Keys have been around for thousands of years in some way or another, so have been ripe for a digital upgrade. With our competitors, although there is some amazing technology, most add confusion or annoyance to the process. There are smart-lock providers whose technology normally requires the changing of locks or at least the installation of an ugly and not always user-friendly pin-pad at the door.

Other options require magnetic cards and in many larger establishments receptionists are paid to ensure that someone enters their email for data capture, further adding to huge setup costs. With Klevio you do not need an extra key, token, or card. Everything is on your phone, similar to Apple Pay.Klevio is installed inside the building and is connected to the existing lock.

For office spaces, co-working and other large blocks, key cards are just one more item that can be shared and lost. With Klevio there’s no need to provide a keycard to anyone and it can be connected to an existing system. Many access systems do not have this benefit, and for offices this means you can change the access to your own unit without affecting the rest of a building.

 

What are the main challenges for your business? 

Changing a mindset. People have used and trusted keys their whole lives. Getting them to accept a simpler alternative isn’t an easy thing to do.

The other difficulty is hardware, especially when it comes to security and people’s offices and homes. With software, if you make a mistake or something doesn’t quite work, you can patch it and update things. If a hardware product has a fault, a product recall is going to be a huge undertaking, and no startup will have the budget to ride the storm like a Samsung or a VW Group. We invested a huge amount of time to make sure that Klevio performs well.

Customers need to build confidence and trust in your offering, rushing to deliver and make a splash can backfire in a huge way.

 

What trends in tech do you see shaping the future of offices and homes in the next five years? 

In the IoT space things are moving fast with the world’s largest companies like Amazon, Apple, Google and Facebook all vying to be the centre of the interconnected home and office. There are hundreds of startups carving out their own little corners too, so the next big shift will be consolidation. The industry leaders are already making moves to buy or partner with interesting startups to get ahead on IP and reach.

On a consumer level, people want smart solutions but are increasingly aware of their rights and privacy. Products that offer that on-demand feel, making lives easier and smoother, without taking too much data, will provide that personal touch consumers want and slowly start to manage the offices and homes of the future.

 

What is the one piece of advice you would give an organisation when looking to digitise its processes? 

Do your research – don’t rush to find a solution. There are companies out there that will be able to make your place of work run more smoothly. You just need to find the one that suits your systems, colleagues and budget.

 

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Interviews

OPPORTUNITIES IN FINTECH: LEVERAGING CROSS-BORDER PAYMENT SYSTEMS

As the world becomes increasingly global, the necessity for cross-border payments grows.

An interview with Aron Schwarzkopf, CEO and Co-founder of Kushki, a payment platform tailor-made for Latin America. 

What are some of the biggest challenges in the fintech sector, specifically related to POS payments?

There is a lack of standardization in the way that payments are handled in different countries, and this presents the most significant challenge because it complicates the process of connecting them all across borders. We’re working to address that by adding some standardized connecting processes and using artificial intelligence to help mitigate these complications and make smooth cross-border payments a given.

Why are cross-border payments becoming more of a necessity?

As the world becomes increasingly global, the necessity for cross-border payments grows. People and businesses are expanding their scope and reach and therefore need to be able to operate in different countries. Part of being functional is the ability to make those cross-border payments, and so the demand for better options for those payments will continue to grow.

What are the key opportunities for cross-border payments?

There are four main opportunities that I see for cross-border payments. The first is facilitating fast and direct payments, cutting down on the extra steps required, but still maintaining the security of the transactions. From this, follows the need (and opportunity) to centralize recurring payments. Smart links are also an area of opportunity, letting people make mobile payments through different platforms using personal payment links. Lastly, expanding the opportunity to store payment information, like card numbers, and using tokenization to facilitate recurring payments.

With several fintech startups launching recently, how can you tell which are valid?

One common mistake is to assume that just because a startup has built something innovative that it is going to be useful. Instead, the most important thing to evaluate is whether the company is offering a solution to a significant pain point or just offering a minor improvement. I recommend comparing the startup to the most established version of its product. Which is less expensive? Which is easier? Which is resolving a larger challenge? If the startup is doing well on both counts, they’re probably on to something.

 

What are the security concerns surrounding POS payments?

The authentication process for credit card transactions is different in different regions due to different technological infrastructure. This inconsistency can generate confusion and concern about the security of various transactions and makes it hard to verify and understand the different fraud management and security processes in place.

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