Behavox PR

Now that we are settling into working from home indefinitely and adjusting the way we work, I have had time to catch up with a few of our regular contacts. The compliance teams at big banks are being contacted by regulatory supervisors who want to know how firms have adapted in the past several weeks and what approaches they have taken. 

Judgment won’t be passed on this for quite some time, and I think some firms are hoping for leniency from regulators under such unusual circumstances, but there has been an indication from many that scrutiny will extend to regulators overlooking any activity that normally results in enforcement. 

A number of the banks who run a vast amount of their models on old legacy technology are not even considering re-calibration, despite the huge increase in false positives — it would be like trying to get an oil tanker that is going full tilt mid-ocean to try and turn around automatically. Some firms have managed to put in place emergency calibration, which helps reduce false positives and get business as usual (BAU) back on track. Practical risk-based approaches from some have involved investigating metadata and data volumes, which is proving fruitful.

For now, various new projects to modernize compliance technology are still on target to be researched, decided and funded, but our contacts suggest there may be cost scrutiny the longer that the non-financial services economy is immobilized. Certain things deemed essential before this have suddenly become “nice to have.”

There are concerns about recordkeeping. With a reduced line of sight and everyone working from home, calls made on personal mobiles to clients, as well as an inevitable rise in the use of social messaging, could present thorny issues if there are disputes and complaints. Control of sensitive information in the home environment is also a big issue — many traders and brokers are working from home where they share a workspace with family or roommates who are unwittingly privy to a vast amount of data and information that would normally be securely held within the confines of the office and the information barriers that are so carefully monitored. For many with experience, the feeling is that this is a regulatory accident waiting to happen. 

It is a time when the culture of an organization, the integrity of its people, and the trust placed in them by senior management, and reinforced by compliance training, will be part of a forced experiment whose results we await with optimism rather than foreboding. We continue to engage regularly with our community of practitioners and clients as the emphasis on compliance and restructuring evolves day to day — we impart as much of this information as we can so that it is practical and insightful and allows the industry to learn collectively and benchmark effectively.

With that as a backdrop, we welcome you to our Modern Compliance Webinar Series, which focuses on what firms are experiencing during these unsettling times and solutions for the latest best practices, policies, and technologies for a distributed workforce. The first set of webinars we are hosting are focused on the changes made by the compliance teams at buy-side and sell-side financial services firms to adapt effectively to the new distributed work environment. 

For the EU edition June 11 at 2 pm BST, we will be joined by two highly experienced practitioners, Chris Hannaford from Nomura and Adrian Ratcliffe from CQS. For the US edition June 18 at 1 pm EDT, we will be joined by two equally impressive compliance professionals — Gautam Sachdev, formerly from Macquarie, and Robert Mendelson from Sculptor Capital.

We look forward to having you join us for each of our live webinars over the course of the summer where you will have the opportunity to ask questions and learn from industry leaders. 

To register your interest in attending, please visit:

EU Risk-Based Approach for Ensuring Effective Compliance – Wherever You Are

US Risk-Based Approach for Ensuring Effective Compliance – Wherever You Are