How Artificial Intelligence Helps Banks Prevent Rogue Trading


Imagine if you could stop rogue trading when it was just the glimmer of an idea -- a stray thought sparked by a trader's expensive divorce, a big loss suffered at a poker game or growing disillusionment with the daily grind. Imagine if, instead of being bogged down by 10,000 emails a day with words like "fraud," compliance teams could instead detect changes in tone and other subtle tics that show a trader's behavior is changing. In a world where a Japanese company has launched artificial intelligence cameras that are designed to predict shoplifting before it happens, it's not so hard to believe that the world's biggest banks are closing in on advances that will allow them to do the above and more. Banks have already made major leaps in trader surveillance in the past few years, embracing communication monitoring tools that look for obvious flash phrases and keywords as well as less obvious ones like "let's take this conversation offline." They have set stricter limits on traders' activities, making it harder for anyone to make the kind of enormous bets that led to one-off losses of as much as $6 billion (in JPMorgan Chase's "London Whale" scandal).

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