Wall Street traders are already threatened by computers that can do their jobs faster and cheaper. Now the humans of finance have something else to worry about: Algorithms that make sure they behave.
Bloomberg News reports that JPMorgan, which has racked up more than $36bn in legal bills since the financial crisis, is rolling out a program to identify rogue employees before they go astray, according to Sally Dewar, head of regulatory affairs for Europe, who’s overseeing the effort.
Dozens of inputs, including whether workers skip compliance classes, violate personal trading rules or breach market-risk limits, will be fed into the software.
'It’s very difficult for a business head to take what could be hundreds of data points and start to draw any themes about a particular desk or trader', Dewar, 46, said last month in an interview. 'The idea is to refine those data points to help predict patterns of behavior'.
JPMorgan’s surveillance program, which is being tested in the trading business and will spread throughout the global investment-banking and asset-management divisions by 2016, offers a glimpse into Wall Street’s future.
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