Why you should look into Investigative
Analytics to rein in risk
The risks in highly
regulated industries
are greater than ever
Regulation
complexity
Increased
scrutiny
Pervasive
fraud
Big Data
explosion
Data
breaches
Penalties for non-compliance and
fraudulent activities continue to escalate
Tom Hayes:
Conspiracy to
defraud
MANDATORY CUSTODIAL SENTENCE
Maximum British sentence lengths by offence
Blackmail
Burglary
Riot
Fraud
Senior trader sentenced
to 14 years in prison
Dealing in
firearms
5 years
(Source: Economist.com)
10 years
15 years
Big banks litigation/fines incurred since 2009: $260B
Notable individual bank litigation/fines
American Bank
$68.1B
British Bank
$33.2B
German Bank
$15.7B
French Bank
$13.7B
(Source: Company data, Morgan Stanley Research)
US and European banks paid
$65B fines and penalties in 2014
(Source: Boston Consulting Group, Wall Street Journal)
US and European fines and
provisions by type
$!
Libor/Euribor/BBA
$20B
FX
$20B
US Sanctions/AML
$16B
(Source: Company data, Morgan Stanley Research)
Most organizations continue
to expose themselves to
financial and legal risk
79%
79% of organizations have
difficulty remaining compliant
with new regulatory mandates
57%
(Source: ALM Information Governance Survey, 2015)
57% of companies are not
able to provide the right
information to regulators
the first time
(Source: ALM Information Governance Survey, 2015)
91%
91% believe their information
governance/compliance approach
is either inadequate or
requiring improvement
53%
53% only spend 0-5% of
revenues on compliance
(Source: Cipperman Compliance Services C-Suite
Survey, 2015)
(Source: ALM Information Governance Survey, 2015)
Content surveillance and supervision
approaches are ineffective
Search only for langu
age concepts
• Lacks context: not dri
ven by a risk
event such as LIBOR fi
xing or
trade anomaly
Fails to find critical issu
es
• Market manipulation:
e.g. LIBOR
• Fraudulent actions: e.
g. Litvak
• Misuse of confidential
information
forces
n
o
i
t
a
l
u
US reg
1% of
y
l
n
o
f
o
review
ations
c
i
n
u
m
m
all co
scope
n
o
i
t
a
c
i
f
i
t
en
Limited id
plaints
m
o
c
r
e
m
o
• Cust
e matters
e
y
lo
p
m
e
l
• Trivia
hit rate
%
3
.0
0
:
lt
u
s
Re
sitives
o
p
e
ls
a
f
f
o
l
• High leve
contained
lf
e
s
t
n
a
v
le
and irre
content
“…using tools that were really designed to
meet the very rudimentary expectations of
FINRA…is like scraping away at the bottom
of the pyramid with a plastic spoon.”
Chief Compliance Officer, Global Investment Bank
Finding the information that matters
Event-based
analytics
Current
approach
200X
IMPROVEMENT
Making the move to an event-based
analytics approach
Search across disparate sources such as communication channels
(email, IM, voice), market events, business events, and trade events
Proactively identify the communications that matter based on
real world events
Contextually highlight problematic behavior and fraudulent actions
Insider trading
Market manipulation
Misrepresentation
Anti-trust/competition issues
Misuse of client information
Rogue employee activities
Result: More than 200X improvement in
finding the information that matters
5
Five ways you can
mitigate risk with
HPE Investigative
Analytics
1
2
3
Leverage advanced analytical techniques
to derive deeper insight into business
activities, communications, and risk events
Detect patterns, surface anomalies, and identify threats
proactively with machine learning algorithms
Interrogate disparate data sources including email, social media,
IM, and voice, in addition to market, business, and trade events
4
Act on contextually aware, real-time compliance alerts to business and
market events
5
Apply powerful, extensible, and cost-effective applications developed
with proven surveillance and digital forensics expertise
Learn more:
hpe.com/software/investigative-analytics
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4AA6-4014ENW, January 2016