Uncovering potential miscreants on the trading floor is big business. Banks have installed new messaging systems that allow them to monitor trader chat more easily, or unleashed artificial intelligence software to uncover behaviour that marks employees as potential rogue traders.
Now, a group of former senior sales staff at Barclays and Credit Suisse have adopted a different approach – using technology to coach employees to change their behaviour before they even step out of line.
Steve Aldridge, the former head of macro eSales at Credit Suisse, is the latest senior markets professional to join SafeScribe, a fintech firm that has created software to warn employees when they’re typing something that could potentially land them in hot water.
“Across all Windows compatible software, SafeScribe warns you if you type something risky, so you can reconsider,” he tells us. “This could be profanity or discrimination; market abuse or misuse of confidential client information; or checking against restricted lists or in support of AML requirements. With banks having paid over $300bn in fines since the financial crisis, we wish we’d been around to help protect them earlier.”
There’s no shortage of firms helping big banks with surveillance of their employees. Digital Reasoning was used early on by the US Department of Defence to track suspected terrorists, but is now being taken up by Wall Street firms to keep tabs on potential white collar crime within their organisations. Behavox, set up by former Goldman Sachs analyst Erkin Adylov applies artificial intelligence to hundreds of former rogue traders to archive their behavioural traits and see how likely current employees are to go off the rails. SafeScribe aims to help employees police themselves.
Aldridge joined the firm as a managing partner for sales and strategy in June from Credit Suisse. He left the Swiss bank in January, having spent over four years there after joining from Barclays in December 2012. “I’ve thoroughly enjoyed helping run some very successful businesses within banks, but nothing quite focuses the mind like running your own company,” he says.
He’s teamed up with his former colleagues at Barclays for SafeScribe. Marek Robertson, the ex-global head of eFX sales and head of European eFICC sales at Barclays, is co-founder and COO, while Matt Clarke, a former eFICC sales director at Barclays who now works at electronic market maker XTX Markets, is co-founder and CEO.
Aldridge says that the final piece of the puzzle is to add a chief technology officer to complete the management team. Then, the plan is to add sales and development staff. “We like entrepreneurial, technology savvy people who have a deep understanding of the challenges banks face,” he says.
Large banks have been forced to pay a cumulative $321bn in fines since the financial crisis, according to recent research from Boston Consulting Group, and much of this has come down to the bad behaviour of employees. Banks have paid a total of $9bn in fines related to the Libor rate fixing scandal, for example.
“Between us we have many decades of experience in the banking world and have seen first-hand how the industry has changed since the financial crisis of 2008,” says Aldridge. “Understandably, the level of scrutiny and regulation has never been greater.”
He says the idea of SafeScribe is a “preventative application designed to shape behaviour”.
“It helps protect companies and their staff from regulatory, legal and reputational risk,” he says.
Image: Getty Images