4 Steps to Optimize Regulatory Data Management for Trader Communications

Market abuse continues to be a growing concern for regulators around the world, resulting in complex monitoring requirements for financial firms. When engaged in trading activities, financial firms have very strict regulatory requirements concerning the collection and retention of e-mails, chat conversations and, more generally, all communication exchanges between employees, customers, and stakeholders.

This activity inevitably leads to the creation and archiving of disparate bodies of data, weighed in terabytes, that is not always readily accessible.

In this post, we will look at how to respond effectively to the requirements for these types of regulations while delivering a data-driven solution for your risk and compliance functions.

Here are four steps you can take to build the data platform needed to enhance compliance with better data integration.

#1 – Integrate all multi-structured information formats (email, chat, speech to text, etc.)

With the explosion of digital communication systems, merely archiving your email inboxes is no longer sufficient in response to regulatory requirements.

In addition to keeping a history of all your emails spanning 5-10 years, you must be able to store all exchanges made via collaborative applications such as Teams or Bloomberg, as well as telephone recordings between traders and customers.

By integrating all these exchanges within the same repository regardless of their format and projecting it in your enterprise data model, you will effectively constitute a “single source of truth” which you can search when necessary.

Rather than adopting multiple distinct archiving solutions, you should create conditions for reconciling data, which will in turn make it easier to analyze content and retrieve information.

This will give you a unique, scalable space. Capable of integrating different data structures, it will enable you to adapt to new data formats and structures that come with new and expanded regulatory requirements.

#2 – Offer all data access keys: by customer, by broker, by date

You must be able to retrieve all your emails by sender, recipient, send date, subject, and even by some element of content either in the body of the message or in an attachment, whatever its format (text, Word, PDF, etc.).

Again, this leads to a very large volume of messages that will not necessarily be easy to analyze. However, to be able to access the history of exchanges between traders and customers at a given moment in time, you must be able to easily retrieve a conversation concerning a given customer or contract.

By integrating data from different sources into the same repository representing your enterprise data model, you will have a coherent vision of the exchanges surrounding a given customer or broker, or on a given date.

This means being able to logically link up archived items of information with one another to facilitate subsequent searches based on a specific customer, trader, or date.

Moreover, a textual search engine must facilitate the search for all information, in real time, independently of predefined links and indexes in:

• the body of the text
• the attachments
• the exchanges recorded, including phone calls (by archiving conversations in speech-to-text format)

It goes without saying that having reliable results is all-important, since this means being able to ensure the quality of the data at all times.

Globally managing archives in the same data repository is compulsory in order to meet regulators’ requirements for transparency.

By adding or enhancing content-related metadata, you will be able to identify unusual reconciliations and movements over time, and generate alerts for managers and internal control teams.

#3 – Ensure overall security of data access

Providing facilitated access to archived data must not be done without due protection.

Obviously, data retained for regulatory purposes is highly confidential and must be protected accordingly, as with all your information systems.

You must be able to:

• strictly separate data by entity and by manager
• specifically protect messages issued by the directorate and human resources
• guarantee the confidentiality of personal data
• define different access rights in line with profiles and with your organization

By integrating all the data in your emails and chats into a repository of archived data, you can record the entire history of exchanges and have all the basic information needed to satisfy regulatory requirements.

You can, at all times and without delay, automatically produce compulsory analysis reports and, if necessary, detailed reports.

#4 – Optimize the management of attachments to reduce the volume of stored data

With the upsurge in electronic exchanges, archiving emails quickly produces terabytes of data and a rapidly exponential increase in the volumes stored. In fact, an email sent to 10 different recipients is often physically stored as 10 different messages, which means a needless proliferation of identical content.

By managing all messages within an intelligent archiving repository, you can automatically associate all messages with the same sender, and remove needlessly duplicated attachments and content while retaining the capacity to access all the information exchanged between the sender and all the recipients.

Ready to discuss further?

If you would like to hear how we’ve helped other financial firms deliver against requirements for multi-structured data integration to solve this specific use case and others like it, please email Jennyfer.Cresta@MarkLogic.com.