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How Big Data Is Monitoring Good and Bad Traders

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The ability to monitor Wall Street traders is ready to move to another level. Global trading firms, like Bank of America Corp. (BAC) and JPMorgan Chase Co. (JPM), are working with tech companies to develop systems that will monitor emotions and activities of traders aimed at boosting performance and compliance, according to Bloomberg Observing the benefits from analyzing customers, trading firms are extending the powers of harnessing big data and algorithmic monitoring for their own employees, the traders in particular. Varying levels of blood pressure, heartbeat, stress, sweating, and emotional changes offer key insights into trader's behavior. Success has been reported in such ongoing experiments at academic institutes like MIT and Kellogg School of Management, as well as at startups like Humanyze and Behavox. While major functions of a financial firm, like M&A advisory or securitization, are team-based and time-bound, trading is individual-centric and impulsive decision-based activity.


Bad behavior database aims to stop rogue traders before they act

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You're young and want to get ahead. You work weekends and message colleagues with inspired trading ideas at all hours. You've just marked yourself as a potential rogue trader. Welcome to the brave new world of trader surveillance, where former Goldman Sachs research analyst Erkin Adylov is building a library of banking villainy based on the behaviors of hundreds of past miscreants such as UBS Group's Tom Hayes and Societe Generale's Jerome Kerviel. Using thousands of inputs, from stress levels in voice recordings to the frequency of visits to the staff canteen, Adylov and his team at startup Behavox grade employees on how likely they are to go bad before they do anything wrong.


How Artificial Intelligence Helps Banks Prevent Rogue Trading

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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).


Emotionally intelligent computers may already have a higher EQ than you

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Andrew Thomson is founder and CEO of VentureRadar, a London-based technology scouting startup that uses big data to connect companies with clients. From I, Robot to Ex Machina to Morgan, the idea of creating robots that can understand, compute and respond to human emotions has been explored in movies for decades. However, a common misconception is that the challenge of creating emotionally intelligent computing systems is too great to be met any time soon. In reality, computers are already demonstrating they can augment -- or even replace -- human emotional intelligence (EQ). Perhaps, surprisingly, it is the lack of emotion in computing systems that places them in a such a good position to be emotionally intelligent -- unlike humans, who aren't always particularly good at reading others, and are prone to missing emotional signals or being fooled by lies.


Emotionally intelligent computers may already have a higher EQ than you

#artificialintelligence

Andrew Thomson is founder and CEO of VentureRadar, a London-based technology scouting startup that uses big data to connect companies with clients. From I, Robot to Ex Machina to Morgan, the idea of creating robots that can understand, compute and respond to human emotions has been explored in movies for decades. However, a common misconception is that the challenge of creating emotionally intelligent computing systems is too great to be met any time soon. In reality, computers are already demonstrating they can augment -- or even replace -- human emotional intelligence (EQ). Perhaps, surprisingly, it is the lack of emotion in computing systems that places them in a such a good position to be emotionally intelligent -- unlike humans, who aren't always particularly good at reading others, and are prone to missing emotional signals or being fooled by lies.