Compliance and Surveillance Strategies GCS Findings

In the latest iteration of Nasdaq’s annual Global Compliance Survey (GCS), feedback was gathered from financial industry compliance professionals to shed light on new and longstanding challenges encountered in surveillance and compliance operations.

Respondents were asked both quantitative and qualitative questions about their firm-wide compliance and hierarchy, key operational challenges, budgets and spending allocation, trade surveillance infrastructure, and overall monitoring practices.

Taking a retrospective lens, the last GCS was highly influenced by global external factors – primarily the COVID-19 pandemic.

At the mid-point of 2020, two-thirds of GCS participants confirmed growing expectations that firms in the financial services industry would continue work-from-home practices as a permanent infrastructure option, even after pandemic concerns faded. At the time, the shift to work-from-home was still a key factor in driving transformation in compliance practices.

This year, external global factors like the pandemic have taken a backseat, with the majority of respondents citing new data sources and technology options as a primary impetus for change in 2022. Our findings reflect that financial compliance professionals are focused on:

• The emerging products that need to be monitored (e.g., digital assets)
• The growth in trading venues
• The shift of trading OTC products onto electronic markets
• The increasing focus on analytics, behavioral science, and machine intelligence to complement existing detection systems

The layering of new investment strategies, products, and asset classes means compliance teams will need to monitor even more sources of data in the future. For instance, as firms consider digital assets and crypto, teams will need to gather data from more sources (venues, counterparties), normalize that information, and create a single source of ‘truth.’ All of which adds further complexity to the setup, integration and maintenance of the surveillance data inputs.

For more information and a deeper dive into the 2022 GCS insights, download the full report below.