Behavioural analytics continues to flesh out risk

Jonathan Boyd
Behavioural analytics continues to flesh out risk

A survey conducted by NICE Actimize of some 60 financial professionals working in broker/dealers and investment banks has found that the clear majority not only recognise that behavioural analytics can identify operational and financial risks, but that more than four in 10 relevant firms are set to deploy behavioural analytics-based solutions in the coming year.

Fully 82% answered the survey by agreeing that behavioural analytics can identify risks that traditional analytics cannnot.

The report on the survey, titled The Emergence of Behavioral Analytics in Financial Markets Compliance, found that some 65% of respondents agreed that such analytics can provide additional insights from trade data – including orders and executions. Key persons are likely to be the focus of that analysis, such as traders, investment advisers and brokers.

The most common behavioural factors likely to be measured include abnormal changes to the individual’s communication method, trading hours and positions. Some 91% of respondents agreed that alerts generated by traditional and behavioural analytics together will “accelerate their investigations processes”.

Joe Friscia, president, NICE Actimize, said: “Operational risk is often heightened because of an inability to detect suspicious behaviors or improper market conduct. Mitigating these risks requires analysis of behavior patterns which often uncovers hidden violations and the individual parties who may be intent on doing harm, such as insider trading or market abuse activities. Behavioral analytics helps firms detect such threats, and can provide a positive impact on risk teams, compliance and front office operations.”

Of the 60 survey respondents, about 36% were from Europe, 22% from Asia Pacific, and 14% from North America.

By function, some 31% were in compliance, 19% technology, 14% “risk-related peronnel”.

By asset class, some 24% worked in equities, 15% in fixed income, 14% in FX, 11% in swaps and 10% in options.

The full survey can be found here:


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