Can you pick up misconduct signals from a conversation? Joining us today is Brandon Carl, the Vice President of Product Management at Digital Reasoning. He oversees their product portfolio and brings together research, machine learning, and development for their audio analytics and conduct surveillance, and he’s here to share how artificial intelligence can change the way we do compliance.

Digital Reasoning Solutions

Digital Reasoning got its start working with government institutions on identifying bad actors. When they shifted over into conduct surveillance, it was a very natural foray into looking for misconduct or bad actors within financial markets. The key behind all these regulations is to instill confidence in people participating in markets and make sure that the market is protected and liquid and that they’re getting fair prices.

Finding signals

When you take a look at bad actors in general, you tend to find two buckets of people:

1) Negligent bad actors who don’t have bad intentions, but are probably just unaware of the laws, and 2) Nefarious bad actors who are working to skirt the system and are intentionally engaging in misconduct.

When you take a look at them, you will see signals around how people communicate: someone may ask people to “keep things confidential” after engaging in some form of misconduct; if someone is narcissistic, you may hear them boasting after the fact. So the technology not only looks for the act of misconduct itself, but these behavioral signals as well.

Passing on the information

There are two views of the world that their customers traditionally think of:

First, the Alert-Based View, which you can think of as a single communication travelling through time that the algorithm will scan. Second is the Investigations View, where teams will review and investigate the alerts.

Now you want to amalgamate the various alerts that have happened over time, and think of those as either weak indicators of misconduct (like boasting), or strong indicators of misconduct (that point to a very specific form of activity). The world has evolved, and we’re realizing our communications say a lot about who we are and what we do.

Ongoing Education Credits

If you’re a compliance professional looking for a convenient and effective way to fulfill your continuing education requirements, check out our 4 hour-long training packages that will keep you up to date with the latest developments in the compliance field.

Resources

Brandon Carl (LinkedIn)

Resources for Digital Reasoning

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Financial Conduct Surveillance

AI is Starting to Change Compliance Practices. Here’s how

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