Jody Houton

A comprehensive compliance program enables financial institutions to protect their digital headquarters against illegal, immoral, and malicious behavior, thereby preventing massive fines, legal fees, employee churn, and business disruption. 

For Ryan Taylor, the Group Head of Compliance and Co-COO at Brevan Howard, a compliance solution like Behavox Compliance, which goes beyond box-ticking regulatory requirements, also allows him to sleep better at night. 

“I don’t only have to worry about the regulatory risks, I also have to worry about the legal risks and the operational risks associated with running a business, which has significantly grown over the last two years, from a staffing level, an AUM level, and from a product complexity level.

“So, the main issue we have to worry about is, do we have the appropriate systems, controls, and staff to be able to meet the relevant challenges, which we encounter with our exponential growth?”

Ryan was speaking with Nabeel Ebrahim, Chief Revenue Officer at Behavox at last week’s Emerging Risks and Bad Actors in Compliance fireside chat. The two discussed much during the hour-long session, including the impact of bad actors to the business and to employee morale; whether non-financial misconduct was as important as financial misconduct; and the importance of keeping abreast of emerging risks like cryptocurrency and SPACs.

When asked why Brevan Howard was just not doing the bare minimum of simply running keyword and lexicon searches to monitor their internal data, Ryan said:

“The regulatory expectation is always evolving, and anybody who has a tick box approach in relation to the sort of controls they have, and in relation to their business will ultimately fail, whether through a regulatory audit visit from a regulator, or whether it’s a bad act within their own organization –  something will go wrong.”

It is for this reason that Ryan believes organizations need to be proactive in protecting their digital headquarters, or be prepared to lose. 

“The repercussions of losing are extraordinary – businesses can close down, not through any fault of the people running the business; their performance may be fantastic, but if they’re not containing and managing the risks within the business appropriately, then it will go wrong. It will have repercussions, and the costs associated with those repercussions will far outweigh the costs associated with having appropriate controls in place to prevent such an action occurring in the first place.”

Monitoring just a percentage of internal data, or relying on lexicon search, is simply an insufficient strategy to surveil today’s ever-expansive digital headquarters, which is why increasing numbers of financial institutions are rethinking their compliance program, and turning to cutting-edge solutions like Behavox Compliance.

Behavox Compliance conducts AI-powered analysis of all corporate communications data, including email, instant messaging, voice, and video conferencing platforms, to help organizations identify illegal, immoral, and malicious behavior in the workplace.

Of course, procuring the correct controls can be a challenge in and of itself; to convince decision-makers of the inherent value in investing in a comprehensive compliance program, and replace their old legacy solutions. 

One of the reasons for this, Ryan believes, is because of the historic perception of compliance as a cost center, and a business prevention center.  

I think compliance as a whole has evolved and has had to evolve, because of regulatory expectations, and of the changing nature of the industry and the business in which we operate. What we’ve tended to find is an effective compliance department can act as a control officer and a business partner. In order for us to be able to do that job appropriately, we have to have the relevant tools available to us, and utilizing those tools and identifying potential weaknesses within a business saves money.

Ryan Taylor, Group Head of Compliance and Co-COO at Brevan Howard

“So it’s not a cost center, it actually saves us money. It saves your reputation, which is almost an asset, which is almost impossible to value, but it’s very easy to see that asset being destroyed through bad activity occurring within the firm itself.”

So, what is Ryan’s advice to any financial institution, or hedge fund management firm that wants to protect its business, its reputation, and its people?

“Whatever money you utilize to develop an internal [compliance] system will pay dividends in the end, because it’s difficult to put a monetary value in relation to that, because you’re almost trying to prove a negative. Effectively what you’re doing is you’re saving money because of the bad events that didn’t happen. So, you have to have the right management within the organization that understands that the reputation, from a regulatory, and a reputational perspective, is one of the key assets of the firm,” said Ryan.

“The practical reality for us is our business as a whole has grown. So, we needed Behavox for the entirety of our business, rather than a segment of our business, because it was the right thing to do, and it’s the right control system to have in place, because if we want to be the best in class, then we need to have the best in class system.”

Check out highlights from the session below, and watch the full session on-demand here.

Behavox’s EMEA Sales Director, Michael Sokolow will be speaking on the “The Realities of Compliant Communications in a Post-Pandemic World” panel at this year’s Risk & Compliance For Financial Services Conference on April 28. Register here.