Compliance driving innovation at Synetec

The summer months saw more and more Synetec clients focusing on their MiFID II preparations with many asking us to advise them on ways they can become compliant but also to help them drive competitive advantage.

Some areas of MiFID II are driving businesses to start paying more attention to data that they are already compiling, and to date, often just storing to ensure they are compliant with existing regulation.

One example is voice call recording. Today, all companies that are regulated, and some others such as councils, record telephone calls. This ensures that if there is ever an investigation by the FCA, or police, that conversations can be accessed and listened back to help the investigation.

This process has flaws, the main one being that sell side businesses in financial services can often generate 10 hours of call content per day across multiple channels. A simple investigation may require the phone calls of 2 people to be analysed to asses potential fraudulent activity, in the above case this could mean a lawyer(s) having to sit and physically listen to around 300,000 minutes of conversation. This would take 1 person 2 to 3 years to complete which is both time and cost prohibitive.

Organisations also use these recorded phone calls, especially in contact centres with direct retail client engagement, to study the quality and effectiveness of communication with clients. However, a buy side firm with only 20 phone agents would generate over half a million minutes of conversation per year to be listened too. Detailed analysis of this data isn’t feasible and thus results in businesses not capitalising on their client engagement.

New regulations state that firms must be analysing their client interaction, in both buy and sell side firms, to ensure that there is no market abuse nor miss selling through poor product governance. This analysis allows organisations to monitor interactions with clients and in real time spot any potential irregular and fraudulent activity or simply poor operational procedures that result in non-compliance, such as an agent not providing a disclaimer on a sales call.

Redbox Recorders are ahead of the game in this space, not only does their service “enable you to meet the challenges of the evolving compliance and regulatory landscape, from PCI Suppression through to the complexity of GDPR, Dodd-Frank, and MiFID II”. Redbox now provide a full transcription service for all recorded calls. This breakthrough in innovation means that businesses can implement big data and data mining strategies across their companies in order to drive business value and mitigate risk.

Over the summer Synetec have been working with our clients to understand what they would like to do with this transcribed data in order to adhere to MiFID II compliance but also to use the data to find a competitive business advantage. The common response is to mine the information and provide the business with real time feedback. Both to the compliance team with respect to any irregular spikes in certain activity, as well as information to CEO’s, in real time, as to the trends in their organisation which can be used to make informed and timely business decisions.

Synetec, working with the team at Redbox in London, and our clients have built an machine learning analytics engine that ingests the JSON files from Redbox’s transcription service, as well as other communications data such as e mail, enrich it with meta data, and provide real time reports to business leaders.

Both the CEO and Compliance officer are able to make immediate decisions that can benefit the firm based on the real-time data analysis rather than waiting for the FCA to knock on the door.

Richard Robinson

@redronrich

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