Having numerous technology systems scattered across the business is the biggest obstacle to financial institutions achieving strong market and trade surveillance this year, according to new research from VoxSmart. 

A poll of just under 80 market participants (79), including investment banks, brokers, and investment managers, found that 69% of firms believe having siloed surveillance systems increases the risk of market abuse being carried out. Just 18% of firms said replacing legacy systems was a barrier, while a mere 13% claimed tracking trader chat through multiple channels, such as WhatsApp and Telegram, would prove to be barriers to stronger surveillance. 

The findings come as the potential for market abuse continues to accelerate globally as financial institutions continue to adjust to the new hybrid working world. Figures from Refinitiv show that just under 6% of suspicious transactions set off alerts among investors last year. 

Commenting on the findings, Oliver Blower, CEO of VoxSmart, said: “For years, financial institutions have been reliant on multiple disparate vendor solutions to detect any potential cases of market abuse. The trouble is that This has not been effective and the risk of risk of sensitive or misleading information being overlooked remains extremely high.

These days, surveillance is looked at on an individual conduct risk assessment basis – which means that very few areas of the business, if any, are out of bounds. Working towards a smarter way to monitor trade, markets, and comms data on one single platform so that there is more visibility into all activity cross-firm and cross-department, has to be the way forward.”