Firms that select to internally source or use less-than-optimal trading surveillance are putting their firms at risk of harm.
The siloed approach to trade, communication, and market surveillance has led to challenges in achieving transparency and data visibility across multiple venues and asset classes. This model of siloed surveillance is not sustainable in the long run. Going forward, firms will need to focus more on risk-based surveillance programs, increase the capability to link structured data with unstructured data to achieve a complete view of activity, develop models to build surveillance for new asset classes, and strive toward more automation in traditional alert-based surveillance programs.
“The COVID-19 pandemic has enhanced the need for effective communication surveillance while the demand for more sophisticated trade surveillance technologies has increased due to regulatory mandates, market volatility observed in March 2020, and market incidents such as GameStop and Archegos funds,” explains Aite Group senior analyst Vinod Jain. “Trade and market surveillance global IT spending reached nearly US$781 million at the end of 2020. Global spending is expected to reach US$906 million by the end of 2021,” he says.
This report highlights areas of the business that surveillance technology providers are addressing and how solutions are evolving alongside industry developments. It also addresses answers to relevant questions for those seeking a solution. It is based on data collected through a request-for-information process with 18 vendors of surveillance technologies. Data collection took place during Q4 2019 and Q1 2020.