As part of the Market Abuse Directive and Market Abuse Regulation (MADMAR), banks must ensure fair practice by traders, and report any potential market abuse in a timely manner to the regulators. It is also critical that banks reconstruct trades and market conditions whenever there is a request from the regulators.
Financial institutions find it challenging to sense fraudulent trades, as these activities cannot be easily detected in siloed communication channels. The existing, widely-used technology wasn’t designed to give a consolidated overview of trading channels. Trade surveillance today needs to have a holistic view to effectively combat market manipulation.
Virtusa xLab’s Trade and Communication Surveillance Workbench solution uses Machine Learning (ML) to incessantly detect new patterns of manipulations and manipulative indicators based on historical data. The patterns through which trades are manipulated can be identified by using deep understanding of:
- Trader’s mindset
- Principles of trade execution
- Trade data
- Trader’s data
- Enable better transparency and traceability on trade operations
- Comply with regulatory requirements
- Mitigate the scope and cost of compliance-related failures