Jody Houton

Behavox held its first event of the month last week, bringing industry insiders and thought leaders together to discuss the myriad ways that cloud technology can help leading financial institutions meet complex compliance challenges. 

The one hour panel discussion, entitled Beyond the Regulatory Tickbox, was moderated by Mike Piwowar, former SEC Commissioner, current Executive Director of the Milken Institute Center for Financial Markets, and the self-professed least “techie member of the Behavox Board”.

Joining Piwowar was Behavox Chief Customer Intelligence Officer, Fahreen Kurji who complemented Piwowar’s knowledge of financial regulatory requirements with insights into the beyond ‘box-ticking’ applications of Behavox AI and machine learning technology.

“Behavox is not about the box ticking,” said Kurji. “We find bad actors to protect the organization from illegal, immoral and malicious behaviors. Whether that’s corporate espionage from state-sponsored actors, or employee litigation, settlements, harassment, toxic workplace, management distractions, that’s all caused by that one bad actor.

So, what you want and what your senior management wants are supposed to be perfectly aligned – you both want to find bad actors. You want to protect the organization from rogue employees, and you want to do that by making sure that your compliance offering is more than just that a tick boxing exercise.

Fahreen Kurji, Behavox Chief Customer Intelligence Officer

Also on the panel was Mark O’Donnell, Financial Services Industry Specialist at Amazon Web Services (AWS), who, as part of his current role, helps banks, insurers, asset managers and other financial services institutions navigate their cloud journeys. In his previous role, as Chief Operations Officer and Head of Technology, at MUFG Securities Americas, O’Donnell oversaw the implementation of Behavox SaaS solutions.

Joining O’Donnell to provide insights into the customer benefits of implementing Behavox SaaS solutions was Mark Polemini, Partner, Chief Compliance Officer and Chief Regulatory Counsel (New York) at Perella Weinberg Partners (PWP). Much like O’Donnell, Polemini had experience of Behavox prior to the recent deployment of Behavox Compliance at PWP, as his previous role as Chief Compliance Officer and Chief Regulatory Counsel at Citadel, involved in implementing Behavox solutions.

Contributing on the condition that his comments were opinions, and not representative of Citadel or PWP, Polemini said of the often ‘box-ticking’ nature of compliance solutions:

“You can do the bare minimum to meet your regulatory requirements by doing some email surveillance in multiple different ways like keyword searches, lexicon searches and sorts. But you have to ask yourself, especially in the climate we’re in today, is there an obligation as a registered advisor or FINRA-registered regulatory entity to really ensure that you’re supervising your individuals and that the communications in there are meeting your policies? It’s more than just, I’m going to check the box by saying I’m looking at a hundred emails or 200 emails, or however many you decide to review a week.

If you have an obligation, why not try to get the most out of it? Why not try to be proactive? If there are problems or issues that are in your organization, wouldn’t you rather know about them first and deal with them, versus finding out about them later, either from regulators or private litigants?

Mark Polemini, Partner, Chief Compliance Officer and Chief Regulatory Counsel (New York) at Perella Weinberg Partners

Polemini expounded by explaining that those “in the business of reviewing messages” are always going to experience a certain amount of noise [irrelevant alerts], and that noise can result in reviewers losing focus, and so anything [like Behavox Compliance] that helps you filter messages to really look at things that could potentially be an issue, and take away things that are obviously not, is really impactful.

Speaking about his previous role at Citadel, and the multinational hedge fund’s decision to implement Behavox SaaS solutions, O’Donnell said:

We were looking for something that would benefit, not just from a risk and compliance perspective, but all the way to the supervisors themselves who trade for a living, talk to customers for a living, and want a meaningful interaction around how to get their supervisory duties in a better place.

Mark O’Donnell, Financial Services Industry Specialist at Amazon Web Services

O’Donnell said that while Behavox’s ability to reduce false positives, group conversations, and conduct thorough case management were all aspects that appealed to the team at Citadel, it was the idea that the Behavox platform was getting smarter each time it was used that really excited them. 

Enabling organizations to conduct thorough analysis of their internal data, across email, text, and voice allows Compliance, Conduct, and Security Teams to protect their company against illegal, immoral, and malicious behavior.

There’s nothing an investigative enforcement attorney loves more than finding ‘juicy’ emails. It may not be violative behavior or illegal behavior, but if there’s other violations going on, it’s just an additional source of leverage that the regulators can use in terms of going to court or attracting a settlement.

Mike Piwowar, former SEC Commissioner, current Executive Director of the Milken Institute Center for Financial Markets

Topics of discussion ranged from the biggest challenges currently facing compliance officers, including emerging risks like crypto, why the need to identify bad actors in digital headquarters has never been more important, and, of course, why increasing numbers of organizations are migrating from on-prem to SaaS, cloud-based monitoring solutions like Behavox Compliance and Behavox Conduct.

“It’s essentially because of the speed, security and scalability that Saas solutions offer. Our cloud-based offering has proven itself as a key driver for rapid business growth, with multiple financial institutions recognizing it as an imperative due to the rise of remote working, and the need for enhanced security and sustainable scalability.”

Interested to learn more about emerging risks and bad actors in compliance? Click here to register for a fireside chat with Nabeel Ebrahim, Chief Revenue Officer at Behavox, and Ryan Taylor,  Group Head of Compliance at Brevan Howard on April 13 at 12pm EST.

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