Big banks are turning into big brother

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.

How to Dress as a Banker at 3 A.M. (eFinancialCareers)

“Considering we spent up to 20 hours straight at the bank, wardrobe management became a major life skill (and should really be a mandatory class for MBAs).”

Degrees That Get You the Highest Paid Banking Job (eFinancialCareers)

Do you really need a quantitative degree to secure a graduate investment banking job?

The Real Perils of Leaving the Comfort of a Big Bank (WSJ)

Here’s a story on what it’s like to leave a big Wall Street firm to start your own company. The hardest part isn’t getting the business, but rather figuring out payroll, picking out the furniture, reeducating yourself on the subway system (no more free town cars) and having to write your own pitch books.

Cohen Names External Board (WSJ)

Steven A. Cohen’s Point72 Asset Management has created an external advisory board that will give recommendations on management, ethics, compliance and technology issues. It’s the latest effort to eradicate the insider trading stink from the halls of what was SAC Capital. New York City schools chancellor Joel Klein, ex-Hearst Chief Executive Victor Ganzi and Yale School of Management lecturer Richard Foster headline the six-member board.

Fresh Faces in Investment Banking (Financial News)

In the latest people moves, Bank of America has named Karim Assef and Diego De Giorgi as co-heads of global investment banking. Four banks – Goldman Sachs, Barclays, Credit Suisse and J.P. Morgan – have named new global or regional heads of M&A in the last two months. And UBS just promoted two new co-heads of its Americas equities business.

Best Golfers on Wall Street (Business Insider)

With the Masters kicking off today, here are the best – and worst – golfers on Wall Street. If you own stock in or work at Goldman Sachs, you’ll be happy to know that its head doesn’t hit the lynx too often. Or he just has a terrible slice.

RBC Hiring Away From Home (WSJ)

The Royal Bank of Canada is continuing its global push. After a rush of hires in the U.S., RBC is now eyeing Europe as a key growth area. They are adding senior staffers in bulk.

Buzz Around the Office

Ogling Men Helped Create Google Images (Complex)

Google Images was quite literally inspired by Jennifer Lopez. In 2000, J-Lo wore a provocative green dress to the Grammy’s that resulted in the most search queries that Google had ever seen. And boom, the idea of Google Images was born. Hopefully J-Lo got some stock out of it or something.

Quote of the Day: “You've got a lot of leeway in running a bank to not tell the truth for quite a while.” – Warren Buffett, 2008