November 15, 2016
The collision between big data and compliance has never been harder to understand. With global financial firms awash with an ever rising tide of data, the question becomes, “How do we make sense of it all?” or, perhaps to put it more succinctly: “What problem are we trying to solve?”
That was one of many questions emerging at a Thomson Reuters sponsored working session this month, bringing together senior executives from compliance, the legal world, and technology. Moderated by Dave Curran from Legal Managed Services, the discussion unearthed just how murky and complex the issue of big data is for many financial companies today.
The issues ranged from not only understanding the types of problems that needed solving, but some of the risks associated with the challenge, as well as unintended consequences. A key problem that several participants highlighted is that firms might encounter scenarios where they are using data for different purposes than for what it was captured.
Tools for monitoring employees
For many legal compliance professionals, big data plays a huge role in identifying bad behavior among employees. New technologies, whether applying artificial intelligence or machine learning, are now able to help identify behavior that seeks to mask wrongdoing or collusion, actions which, as we have seen, can cost firms billions.
One area ripe for sophisticated surveillance is the communications among employees and with their clients. Making sense of all of this “unstructured data” is where new tools are being applied, helping compliance to uncover possible wrongdoing.
The challenge, however, is substantial, with companies at different ends of the spectrum in terms of how they use technology and big data in mitigating such risks. Several participants agreed that many banks are still using a linear approach to finding collusion with thousands of analysts examining alerts.
Privacy concerns are front and center, with participants highlighting what is likely to become a growing concern for compliance and human resources. As one compliance officer put it, “There is the human behavior risk, when big data meets people and human behavior.”
Skill sets differ among stakeholders
How is big data consumed? And how is it presented to different constituents within large organizations, all of whom may have different technical skill sets when confronted with reams of information?
It was mentioned in the event that there is a complete skill-set mismatch in trying to get everyone together. As a result, you are often looking at the same data in different ways, depending on one’s perspective.
Culture equally important
An organization might have all the right tools to get the right data and still be stymied in using it effectively. Why? Culture. As we’ve seen in recent scandals – Wells Fargo was brought up as an example – you can have the right tools, but if you don’t have a strong culture, the information might never get to who needs it most.
Getting business buy-in
Finally, big data could not be an issue that was owned solely by IT, legal, or compliance. Several participants cited the need to get frontline business leaders to buy into a big data strategy. They have to understand how it will help them, whether in reducing compliance costs, mitigating employee risks, or even aiding existing business practices, such as understanding your customers better.
At the end of the working session, it was clear that there were numerous opportunities to drill down further into specific areas of interest. If you are interested in diving deeper into some of these topics and connecting with your peers, as well as some of the leading professional services and technology companies in the world, feel free to join the Big Data Forum LinkedIn Group, serving as a forum to discuss the collision between big data and compliance and legal functions.