Nasdaq to apply machine intelligence to market surveillance via Digital Reasoning deal
23 February 2016 | 2358 views | 0
Nasdaq (Nasdaq:NDAQ) and Digital Reasoning, a leader in cognitive computing, have announced a strategic alliance to offer next generation, holistic surveillance technology to the global capital markets, including the buy-side, brokers, regulators and exchanges.
Digital Reasoning’s eComms monitoring for proactive compliance and Nasdaq’s industry leading and award-winning SMARTS Surveillance solutions will deliver a unified approach through the integration of trade surveillance alerts with natural language processing and machine intelligence-based technology all within a single interface. In addition, Nasdaq has participated in Digital Reasoning’s Series D investment round.
“Digital Reasoning is a true disruptor in the financial technology space,” said Valerie Bannert-Thurner, Head of Risk & Surveillance Solutions, Nasdaq. “Our partnership with Digital Reasoning will not only enable us to strengthen our current surveillance solution but also allow us to utilize the best capabilities and data sourced from each product to deliver monitoring technology that will allow firms to take a truly holistic approach to surveillance across structured and unstructured data and strengthen their monitoring and detection capabilities.”
Digital Reasoning’s sophisticated natural language processing and machine intelligence-based technology is able to understand how people communicate by analyzing the context, content and relationships within human communications, while semantically revealing concealed insights - enabling firms to better understand the intent and meaning behind specific behaviors. The capabilities encompassed within Digital Reasoning’s platform, when combined with the data and detection capabilities delivered by SMARTS, offer immediate benefits to the surveillance community. Surveillance analysts can leverage insights across communications and trade data to automatically prioritize areas for evaluation and enable accurate and rapid investigations.
“As an existing user of both vendors, the strategic agreement between Nasdaq and Digital Reasoning presents an exciting development across the UBS market surveillance tool set,” said Kirsty Everett, Global Head of Monitoring & Oversight at UBS. “By combining existing trade surveillance alerting with communications data, it should quickly and holistically provide the surveillance analyst with specific electronic communications associated with potential market manipulation and/or conduct risk issues.”
In addition to contextualizing current alerting processes, the partnership will drive a paradigm shift in behavior detection to identify heretofore concealed activities, conduct investigations much more quickly, and continue Nasdaq’s leadership in establishing and enabling industry best practices and standards in surveillance.
“The application of machine intelligence to identify inappropriate activity in digital communications greatly boosts positive predictive values over traditional methods, and it brings a radical new technological approach to the field of behavior analysis,” said Marten den Haring, Chief Product Officer, Digital Reasoning. “By partnering with Nasdaq, we can raise the bar in signal detection across disparate systems and apply deep understanding of context to assess risk, without adding workload to the already burdened surveillance analyst.”
With over 20 years of experience as the industry benchmark for surveillance platforms, Nasdaq SMARTS technology powers surveillance and compliance for over 40 marketplaces, 12 regulators and 110 market participants across 65 markets globally.