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Interviews

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

HOW NEW TECH START-UP IS SHAKING UP THE IT CONTRACT MARKET

Neil How, CEO and Co-founder, ten80

 

1. What is ten80?

ten80 enables cost savings on SAP/software projects by an average of 43%. We do this by switching companies to an on-demand workforce – think Uber and how that has disrupted the taxi industry.

The ten80 marketplace connects companies with around 47,000 verified contractors, using algorithms to match companies with the very best experts that then deliver on projects remotely. This enables SAP customers to utilise a global workforce and break free from geographical borders, as well as take advantage of international market rates. In other words, it gives them the exact resources, when they want them, for however long they need them for and at a cost-effective price.

 

2. How did the idea of ten80 come about?

I’ve been lucky enough to work with SAP my entire career. My journey first started at the end-user side. I ran my first SAP implementation project in my early twenties and went on to form an SAP Centre of Excellence to allow for long term improvement.

Over the next six years, I ran three other major change programmes before joining the consulting world, and for the next 10 years I worked with various consultancies running numerous projects in a wide variety of sectors, including retail, utilities, banking public sector and government.

But having spent time working both end-user side and consulting side, it became clear that SAP clients were struggling to access the best in class consultants and contractors. Wanting to get this knowledge into the wider world, ten80 was formed to digitally link the global contracting workforce to a global customer base, while allowing clients to digitally access the ‘best in world’ not the ‘best in organisation’.

 

3. ten80 is solving business problems, but how is it helping contractors?

Consistency of regular work is becoming a challenge for many contractors, and the impact of ‘dead time’ becoming more severe and likely. This is made worse through an ever increasing pool of expert contractors.

In addition, selling time for money is not a sustainable model for financial freedom, and contractors are tired of being capped at an ever decreasing day rate. Contracting also puts a huge pressure on family life, especially if you have to be on-site away from home — missing out on time with family and loved ones is a huge drawback, and there is little work life balance.

With ten80, contractors can benefit from the following:

  • An ‘always on’ demand for work
  • The ability to sell their knowledge and capabilities rather than a day of their time
  • Being able to carry out their role wherever in the world at any time, with total bulletproof security

 

4. What are the main challenges for your business?

ten80 is operating in a completely new area — outcomes-based delivery, so not being able to be ‘put’ us in a specific vendor box type is a challenge. Often corporate organisation’s procurement processes want to categorise us as a systems integrator or recruiter, but we are neither.

Being the first to market is always hard. We are offering some really powerful benefits to businesses and contractors, but we have no one to follow and are learning at every step of the way. There is a great saying that I have always believed in – “Success leaves footprints.” The big difference with ten80 is that we are making them! We are running agile processes on each stage of our journey. Everything is tested, iterated, refined, repeated. It’s the curse of being the first, but actually embedding continual improvement into our business has been one of our rocks of success.

Another challenge has also been controlling deal size. Big corporates have latched onto the benefits of what we are offering and are immediately referring us globally. It’s great but can quickly escalate and then take longer to close.

 

5. What’s next for ten80?

Our focus/goal is to secure a major investment over the next six months. That’s the first ticket to the major league and will give us the potential to grow to 150 people and some pretty big numbers revenue wise. We are entertaining some pretty important investment houses and are looking forward to one of them closing.

Running alongside that we have some really amazing companies in our pipeline, and I am looking forward to welcoming them onto our platform.

 

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Interviews

GOING FOR INVESTMENT IN CENTRAL EUROPE: START-UP LIFE OUTSIDE A TRADITIONAL TECH HUB

A Q&A with Bence Jendruszak, Co-founder and COO at SEON

 

  1. At what stage did you realise you were going to need an investor onboard?

During the early stages of the development (when completing our minimum viable product), we managed secure a Central European payment gateway in order to start using our system (free of charge). From this point on our product development was user feedback driven. It was at this stage, that we realised that our product has gained enough proof of concept, that we were ready to pitch the idea to investors.

 

  1. How important was the investment to getting your business to the current point?

Our pre-seed investment (50k EUR in January of 2017) was the initial kick-start to arriving to the current point. That micro-investment allowed myself and Tamas (Co-founder and CEO or SEON) to start working on the project full time and also to scale up the development team (from freelancers to full time programmers).

 

  1. How did you start the process of looking for an investor? 

We started by setting up our very first pitch deck. Of course, a lot of market analysis and USP shaping went into this. Once we had our first deck, we started contacting investors and started pitching the project to them. That specific pitch deck was very different to what the current version looks like.

 

  1. Were you aware of the challenges you could potentially face as a tech start-up in CE?

We were very well aware of the challenges. The European investment mentality is different than that of the US investment mentality, for example. Investors tend to be more conservative in the EU. Now imagine what the investment mentality may be like in the CE region. Nevertheless, we were also aware of the advantages of setting up a tech start-up in the CE region. The talent pool of

engineers and the cost of labour is by far the best in our home-turf – so the challenge was worthwhile.

 

  1. What was your journey to finding an investor like? Challenges / milestones?

Initially, we were faced with multiple unacceptable deals. The terms and conditions weren’t right for us in the long term. We were always aware that in order to build an international start-up (that would later develop into a scale-up), we had to on-board investors that we were fully comfortable to cooperate with – and vice versa. We needed to be on the same page and have a shared vision for SEON’s future.

 

  1. How did you find your lead investor, Portfolion? What else do they offer in addition to financial investment? (international network etc.)

We met them by introduction from an acquaintance. Portfolion is a well renowned VC in the CE region. They seemed like a partner that we could on-board into our boat and we could steer the ship together with them. They are the subsidiary of OTP Bank, one of the largest banks in the CE region. A potential gateway to partnering with a major bank seemed like a mutually beneficial setup. Aside from receiving a financial investment from the fintech fund of Portfolion, we can happily say that we are providing our fraud prevention services to OTP Bank as of today.

 

  1. What have you learned about the investor landscape in CE?

We found out that European investors are even more sceptical when it comes to CEE countries. They tend to avoid start-ups that aren’t located in hubs like Berlin or London. For them, Hungary is still seen as a former Eastern bloc country playing catch up with the rest of Europe in terms of living standards and infrastructure.

That said, there are a lot of investors in the region, but you really have to focus on getting in touch with the right organization. Onboarding an investor is a long-term partnership, there has to be a fundamental alignment in terms of the vision and mission of the two teams. We believe that we’ve managed to partner with investors who share the same vision and mission as us (up to date).

 

  1. What role will investment play in the next growth stage of the SEON?

 The next growth stage is focused on international expansion. We will be seeking an investor that can provide not only funds, but also somebody that has a solid portfolio of fintech companies and a partner network of financial institutions.

 

  1. Do you have any advice for other businesses in your position that are looking for funding in the CE region?

Do not rush into any deal that is in front of you, time is on your side. If you are in an early stage, make sure to approach as many investors as possible, in order to be able benchmark each opportunity.

 

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