Big banks are turning into big brother

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Surveillance

We wrote in March about a group of security startups that are creating predictive analytics software to help companies – likely banks – track staffers online activities in a effort to catch them doing sketchy things, like rounding up proprietary data before quitting. The unfortunate thing was that we didn’t get any names of the firms that are embracing this new age form of compliance. Now we have one.

J.P. Morgan is rolling out a program that will use software to track dozens of employee data points to catch them in the act, but also to predict future rogue behavior. Interestingly, Bloomberg didn’t get the story from an anonymous source within the bank. J.P. Morgan has gone on record. Clearly they want employees to know they are watching.

The program, which is currently being tested in J.P. Morgan’s trading business and will be launched across investment banking and asset management divisions by 2016, will look at traditional factors like violations of personal trading rules and breaches of market limits, according to Bloomberg. But it will also eye less obvious data points, like if someone skips a compliance class.

The bank didn’t elaborate on other methods of surveillance, but one can likely assume emails, IMs and telephone transcripts will all be fair game. One can also likely assume that J.P. Morgan is not the only bank to launch such an initiative. The security companies interviewed in March hinted that they work with several financial services companies.

Plus, one of the sources quoted in the Bloomberg article doesn’t work with J.P. Morgan but does count Goldman Sachs and Credit Suisse as clients. “We’re taking technology that was built for counter-terrorism and using it against human language, because that’s where intentions are shown,” said Tim Estes, chief executive officer of Digital Reasoning Systems. “If you want to be proactive, you have to get people before they act.”

Whether you like it or not, surveillance and predictive analytics appear to be the new face of compliance. Be prepared.

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