The future of RegTech - Market Abuse Surveillance - Shield

1. THE FUTURE OF REGTECH MARKET ABUSE SURVEILLANCE

2. SHIELD Compliance officers walking the trading floor to surveil for market abuse seems so … so … last century. Antiquated at best, ineffective at worst, traditional market surveillance has come a long way indeed. Even in the last few years, technology, especially artificial intelligence, has allowed the RegTech field to make gigantic leaps into the future. Today, the breadth across multiple electronic communications channels to the depth of surveillance digs deep into the nuance of a conversation. PwC has recently released their 2025 – The Future of Market Abuse Surveillance report and there are many insights to bring forward into the conversation around RegTech. Given how the firm creatively approached the subject through storytelling, the scenario highlighted naturally lends itself to further discussion. Let’s take a look at this. COVID CHAOS If it were not for the two million deaths and more than 80 million infections, the ripple effect of all things COVID would be almost comical in their scope. It’s inconceivable how something about 1/500th the diameter of a human hair can topple economies, cripple industries and essentially wipe out society and living as we know it. HTTPS://WWW.SHIELDFC.COM/

3. WHAT’S CHANGED PWC published its first Market Abuse Surveillance survey results in 2016. In the four years that have elapsed since they shared that initial set of findings, much has changed. Financial firms were on the path towards digital transformation but seemingly grudgingly so. COVID accelerated the adoption of a cloud-based strategy because doing so became essential as business continuity is imperative. Banks are notoriously “slow adopters” because they’ve long held true to the adage, “If it ain’t broke, don’t fix it.” BLOCK AND TACKLE Implementing changes like policy and governance in monitoring surveillance is essential but straightforward. Establishing cross- departmental alliances and convergent operations is equally essential but not as simple. Migrating all transactions to a cloud- based architecture coupled with case consolidation have clear benefits from a management perspective but are undoubtedly complicated endeavors for any organization to undertake. PREDICTING MARKET ABUSE BEFORE IT HAPPENS It’s one thing to establish market surveillance systems and practices capable of retroactively assessing and detecting suspected incidents of market abuse. Conversely, it’s quite another to deploy solutions equipped with behavioral analytics technology that can predict the potential for market abuse – before it even happens. HTTPS://WWW.SHIELDFC.COM/