With Michal Speranza, Senior Vice President Corporate Strategy and Marketing, IPC
Over the last two years, firms in the US have seen an expansion in the number of users that are falling under the umbrella of regulation, where users that either didn’t need to be monitored, regulated, controlled, or secured are now being cast into the same oversight as a typical front office trader in jurisdictions like Europe and Asia.
IPC’s focus is making sure that we address the entire ecosystem of regulated users as it relates to areas such as compliance, communications, securing those communications, allowing them to exchange information with their counterparties securely and then mitigating their risk. A lot of the transition that we’ve gone through as an organisation is to make sure that we continue to evolve to meet those needs of the clients.
Communications is one of the more challenging elements to solve from a regulatory perspective because a lot of solutions currently deployed were built to address dispute resolution rather than regulatory adherence. Many current solutions and technologies are not sufficiently integrated to the communications infrastructure and struggle to cater to the day 2 needs of correlating interactions with transactions or analyzing the content for surveillance purposes.
The ongoing trend is therefore to try and harmonise the solutions as much as possible because it makes complying with inquiries and regulators, securing the business, matching communications with actual transactions much easier. We’re working to unify communications associated with capital markets activity as much as possible and provide end-to-end oversight so a firm can work with a single provider that can address the whole sphere of challenges that they’re facing from a compliance and a regulatory standpoint.
A major effort that is ongoing is to unify the technology stack and consolidate the different media types. With communications varying in form such as email, instant messaging, voice communications, chat rooms; many customers are trying to unify that as much as possible to aid the audit control and inquiries that are required to comply with the regulators.
Making money from data
Looking at how data compliance use has evolved over the last few years, when firms had to comply in the US for example following Dodd Frank, they simply adopted what technology was available. There was an element to which compliance came first, and time was a principal pressure. They were not stepping back, surveying the landscape of technology and designing a solution from the ground up. A lot of those solutions are challenging, cumbersome and have high operating costs when it comes to the overall use, maintenance and ensuring that they stay operable.
Now, firms are doing two things. One, firms are increasingly looking at this area and evaluating how they make the technology not just a liability but a competitive advantage; having a more efficient operating model to comply with the regulations, and then using that to boost by return on equity and lower cost bases.
Secondly, firms now have a vast amount of data, and they are starting to look at data as an asset instead of a liability, and they’re trying to interrogate, mine and draw useful conclusions from the data that was previously unused. Some firms are starting to study successful interactions, client communications, understanding what leads to a successful transaction or a profitable one and how to replicate that across certain environments. A lot of that information today is locked up and captured in unstructured formats that were designed for compliance and regulatory purposes. The new challenge is to gain access to that dataset, to use it, study it and actually turn it into a source of productivity.
The future of data
First and foremost, we’re focused on holistic end-to-end solutions to make sure that we streamline the challenge of regulatory oversight as much as possible. Intellectual capital is definitely a challenge in this area in terms of actually locating, finding, securing, recruiting and retaining staff that understand the specific needs of the market.
There are some fascinating developments occurring with regards to improving analytics capabilities on the data sets;this is very much related to enhancing user productivity or improving surveillance. As firms try to mine the data, areas like the fidelity of the conversation are important. If things aren’t clear, if they’re not archived correctly, studying them for a productivity purpose or for a surveillance purpose becomes very challenging.
We obviously study the regulations as much as we can. They’re incredibly voluminous documents, but we also have the benefit of working with all of our customers. It’s something that allows us to be at the forefront of solving their challenges and they’re not shy when it comes to telling us what they would like us to do with the products and services. We share the front row seat with our clients and we very much try and partner with them to make sure that we’re investing in the right areas, it’s a collaborative approach.
The concepts we’re working on; security, policy, controlling communications, the fidelity of the audio; our clients have the pen on our roadmap when it comes to those things. We want to build things that provide value to customers and we definitely have a multi-year horizon to be able to do exactly that.
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